Self-Employed Mortgage Options

Mortgages Gert Martens 22 Jun

Trying to get a mortgage when you are self-employed can often feel like a struggle, especially when it comes to verifying your income. Lenders look at your credit report as well as your income to determine how high of a credit risk you may be. This means having to submit extra documentation in many cases. However, being self-employed doesn’t mean you can’t get a mortgage just like other homebuyers. There are options and programs available and our Alberta mortgage broker team is here to walk you through them.

Prime Mortgage Loan 

A prime mortgage is based on your actual earnings. You are basically showing that you have paid yourself and that you have declared enough income for a 2 year period. This is a good option if you have good credit, can show that you have managed your debt really well, and your credit history goes back for at least 12 months. You’ll also need to make sure that you have properly filed your tax returns and don’t owe any money to the CRA. A lender will start by looking at Line 150, your stated income, on your tax return. You can qualify for up to 5 times your stated income in many cases.

For the Newly Self-Employed

What happens if you have only been self-employed for less than 2 years? Does it mean you can’t qualify for a mortgage? The short answer is no. CMHC offers a lending program aimed at those who have been self-employed for under 2 years or less. When you have worked for an employer for a few years and then move into self-employment, your tax return will show income that is much lower. The program from CMHC allows you to show what you could potentially make based on your bank statements and contracts for work, rather than relying on your tax return.

The CMHC program is only available with a maximum term of 25 years and purchases that are under $999K. You will also need to have good credit.

Stated Income Mortgage

This type of mortgage is best for self-employed people who have a gross income but has that income lowered due to expenses and aren’t able to meet the loan qualifications. Lenders will use a figure between your gross income and net income (lines 150 and 236 on your tax returns) and come up with what is called an “Income Reasonability” figure that helps you to qualify. In order to qualify for a Stated Income mortgage:

  • The purchase price needs to be under $999K
  • The property needs to be owner-occupied and not rented out
  • You will need to make a down-payment of at least 10% 
  • 5% of the down payment needs to be funded by you and not fully gifted.
  • You can’t have any late payments over the past 12 months.
  • You must not owe the CRA any money and tax returns need to be filed accordingly

Alternative Lenders 

If your credit isn’t that good or you don’t make enough income to qualify for a traditional loan, you can use an alternative lender. With this option, you are able to use alternative ways to prove your income, such as with invoiced, bank statements, and work contracts. However, you will be charged between 0.5% to 1% more than with a traditional loan, are charged a closing fee, and the policies for appraisal tend to be stricter. 

Financing Through Credit Unions

This option sits between traditional and alternative lenders. To qualify, you need to show them at least 3 months’ worth of business statements, 2 years’ worth of tax returns, and the interest rates on this type of loan are usually higher than traditional mortgages. You are also able to buy properties that are over one million dollars.

Private Lenders

If you aren’t able to get approved for a mortgage through the above options, you could look into using a private mortgage lender. While private lenders aren’t as concerned about your taxes, income, and whether you owe money, they will charge a lot more and should really only be used as a last resort. 

If you are self-employed and want to know what mortgage options you may qualify for, give our Alberta mortgage broker team a call today!

How To Build Your Credit

Mortgage Tips Gert Martens 22 Jun

Having a good credit score and credit history will play an important part when applying for any type of credit, such as personal loans, credit cards, car loans, and mortgages. Many people who have a very short credit history and are trying to build or repair their credit are often faced with the dilemma that you need credit to get credit. There are things that you can do to help you along though, and our Alberta mortgage broker team is here to help.

Open a Bank Account

This is probably the first, and most important step toward building your credit. When you open a bank account, you are getting your foot on the ladder towards a better credit score. We suggest having one checking account and one savings account. If you do have a checking account, you need to be careful and make sure none of your checks bounce or that it doesn’t become overdrawn. This is especially important in the early days of building your credit. The purpose here is to show lenders that you are responsible when it comes to handling your debts. 

Getting Bills In Your Name

When lenders review your credit history, they will look for accounts that are in your name, including things like electric, phone and gas accounts, as well as a lease on an apartment. Again, it’s really important that you don’t miss payments or make payments late with these accounts because they will impact your credit in a negative way. 

Stable Employment and Residence History

Another two areas that lenders will review are your residence history and employment history, especially if you haven’t yet built up credit. What they are looking for is steady employment and residency. If you seem to be going from one job to the next over a short timeframe or have a long period where you have been unemployed, it can be a red flag. It’s the same for your residential history. If you seem to be moving around a lot and switching jobs, it can seem as if your situation is too unstable.

Apply For Gas and Store Cards

Once you get your credit history going, you can try to apply for a gas or store card. You’ll find a lot of major stores that have their own lines of credit, such as Target, Macy’s, and JC Penny. It’s a bit easier to get approved for this type of card in the beginning, than a major credit card. Many gas stations offer their own line of credit as well. However, you need to check that these lines of credit are being reported to the credit bureau. If they aren’t, it defeats the whole purpose of building your credit and they aren’t worth applying for. 

Secured Credit Cards

Once you have built up your credit a bit, have shown your situation is stable and that you are able to deal with your credit responsibly, you can try to apply for a major credit card, such as a Visa or Master card. If you aren’t able to get approved for these, you should talk to your lender or bank to see if they have a secured credit option that you can qualify for. The amount of credit you get on these matches what is in your bank account. 

Loans

Qualifying for loans will help with building your credit history faster. Loans tend to be based on your annual salary and you have to make sure that you don’t miss or be late on making your repayments. Otherwise, it will have a negative impact on your credit score.

It’s isn’t impossible to build up your credit, but it does take some patience and work. The most important thing to remember is to always make your payments on time each month. This goes a long way in showing how responsible you are with your debt and credit.

If you want more advice on building up your credit, give our Alberta mortgage broker team a call today for more helpful tips. 

 

Mortgage and Real Estate Market Update – Spring 2021

Mortgages Gert Martens 20 Apr

Grande Prairie Mortgage Broker | Real Estate Market Update

This time last year the housing market started to look somewhat uncertain as the Covid pandemic started to make its rounds. With lockdowns, many sellers and agents had to find new ways to safely show homes and changes were made all over. It was a bit “stop and start” but many areas have rebounded. Our Grande Prairie mortgage broker team has the latest updates.

Housing Market Update for March 2021

A year on from the pandemic, we are seeing a rebound in oil prices and a recovering national economy. 2020 was certainly a challenge for Alberta as a whole, which struggled to do as well as other areas. Things ended on a high note at the end of 2020 though. A common theme we are still seeing is a stagnant or declining supply of homes on the market. Experts are predicting that the market will rise for the province in the months ahead. Let’s take a look at Grande Prairie and nearby areas’ figures.

Currently, housing prices in Grande Prairie are averaging around $313K. This is up 10.6% from last month, up 5.4% from last quarter, but down 9.2% from this time last year. Housing inventory for the area is just under 200 homes coming onto the market in the past 28 days. 129 of these have sold and homes are selling at a 96% selling to listing price ratio. Homes are spending an average of 43 days on the market.

Of all the residential properties, condo and detached home sale prices have dropped 3% since last month, with an average of $334K overall. We did see a rise in 4 and 6 bedroom home prices, but a drop in 2 and 3 bedroom homes. Condominiums have seen a big 49% drop in average sales prices, sitting at $141K. Townhomes dropped a bit a few months ago, but we are seeing average sales prices coming up again, and currently at $245K.

In comparison, in Edmonton, the average selling price is $378K, up 4% from last month, up 0.34% from last quarter, and up 8% from this time last year. Inventory in Edmonton has seen close to 2,300 homes on the market in the last 28 days. Over half have sold in this time with a selling to list price ratio of 149% and most homes sitting on the market for 34 days.

Detached homes in Edmonton have seen an overall rise of 10% in sales prices, except for the larger 6 bedroom homes, which saw a drop of 19%. Condos have seen a rise in sales prices of a big 387%. A 3 bedroom condo that cost $219K about three months ago can now cost $2.7 million.

Grande Prairie has a few hot neighbourhoods. Avondale has seen an average sale price of $244K, with 17% of homes selling above their asking price and only spending around 10 days on the market. In Northridge, the average selling price is $355K, with 18% of the homes selling above their asking price. Over in Countryside South, the average home sells for $278K and 43% of these homes have sold for over their listing prices. With hot homes getting snapped up within days.

On the other end of the spectrum, where the market is much cooler, Cobblestone has seen average sales prices of $285K, the Central Business District an average of $229K, and Westgate an average sales price of $239K. Inventory here has been very slow as well.

Impact on Mortgage Rates

We are still seeing record-low mortgage rates being offered by lenders, including the big five banks of Scotiabank, CIBC, RBC, BMO, and TD. This may keep the market competitive for a few more months but experts are predicting that we won’t see a significant rise in mortgage rates by 2022.

There has been some push by the province for the federal government to make adjustments to the mortgage stress test, feeling that the rules at this time are creating a blockage for homeownership that is unnecessary and detrimental. The groups that are being affected most are first-time home buyers and families looking to upgrade to something larger. We’ll be keeping an eye out for any changes to come.

If you have more questions about current mortgage rates and home prices, give our Grande Prairie mortgage broker team a call today!

Seasonal Home Owner Tips

Mortgages Gert Martens 20 Mar

Grande Prairie Mortgage Broker | Seasonal Home Owner Tips

A home is a big investment and it makes sense to protect that investment by taking care of the home. Seasonal maintenance is something any homeowner should practice. It will help you to identify any bigger issues, as well as help keep your home in the best health it can be in. Our Grande Prairie mortgage broker team has some helpful tips when it comes to seasonal home maintenance and care. 

Create a Checklist 

The maintenance you do will depend on what season you are in. Many homeowners use autumn and spring for their main home maintenance because it gets them ready for the colder days of winter and hotter days of summer. We’ll go through each season and what you should have on your to-do list.

Autumn

Autumn brings cooler temperatures and falling leaves, and a lot to clean up! Autumn leaves can be a beautiful sight as they change colours, but they can also clutter gutters. With the cooler weather, you may start using your fireplace if you have one, or use more heat. Here is your autumn maintenance list: 

  • Check and clean your gutters out once a month at the least. Too much buildup can cause damage to the gutters.
  • Regularly rake leaves and properly dispose of them.
  • Have a look at your roof and chimney to check for damage or cracks.
  • Install or replace weather stripping around doors and windows to keep heat in.
  • Have a fireplace and furnace inspection.
  • Store your patio furniture.
  • Disconnect and store your garden hose.
  • Check your smoke alarms and carbon monoxide detectors to make sure they are working.
  • This is a good time for going over your snowblower and making sure it’s in working order.

Spring

Spring brings us warmer days and many of us do our annual spring cleaning of the home. This includes the exterior of the home and the yard, as well as getting your garden ready for planting. Here’s your Spring maintenance list:

  • Give your roof a check and clean out the eaves-troughs.
  • Do paint touchups if needed.
  • Give the windows a good wash, both inside and out.
  • Bring that patio furniture and garden decorations back out. You may need to give furniture some airing.
  • Give your grass its first cut to help bring it back to life.
  • Start weeding now, before they get out of hand.
  • Test your sump pump if you have one.

Winter

The prep work for winter was done during the autumn, but there are things to look out for during the winter months. Here’s what is on your winter list:

  • Protect your central air system by covering it up and/or removing external air conditioners from windows.
  • Set your snow removal tools in an easy-to-reach area. 
  • Be sure to replace and clean your furnace filter on a regular basis now that you are using it more. 
  • Check your drains to make sure there are no issues or debris clogging things up. It’s harder to do pipe repairs in the winter with frozen ground.

Summer

Days are longer and nights shorter. A lot of the prep work for summer was done in your spring checklist, but there are still things to keep an eye on. Here’s your spring checklist:

  • Make sure to keep up plant and bush pruning.
  • Maintain your landscaping and cut your grass.
  • Be sure to check and replace heat and air conditioner filters.
  • Have your water heater flushed.
  • If you have a barbecue, now is a good time to make sure it’s in good working order. 

Staying on top of your home’s maintenance can make a big difference. It gives your home that curb appeal needed and will help you identify small issues before they become bigger ones.

Do you need to do home maintenance and want to refinance your mortgage? Give our Grande Prairie mortgage broker team a call today!

Characteristics of a Great Mortgage Broker

Mortgages Gert Martens 21 Dec

When it comes time to buy a home and apply for a mortgage, you want to get the best mortgage package for your situation. The best way to do this is by using a broker, like our Grande Prairie mortgage broker team. Shopping around for the right broker is also important, and there are some characteristics that you should look for if you want to find a great mortgage broker.

They Should Put Your Best Interests First

When you use a lender, they often push for a mortgage package that is beneficial to them, rather than to the client. A mortgage broker, on the other hand, is less biased and works to find the best package for you. A great broker needs to have the experience and knowledge needed to find options that fit your financial situation.

Unfortunately, there are some brokers who are not as unbiased and will put their needs before those of their clients. For example, they may offer or push for a mortgage package that isn’t very suitable for you because they get paid a large commission on it. This could cost you more money over time.

Honesty and Transparency

Another important characteristic of a good broker is transparency and honesty regarding everything they are doing. A good mortgage broker won’t promise you more than they are able to deliver because they are that desperate to close a deal. This is a big red flag that they may be hiding fees or making changes to the mortgage package and not telling you. A great mortgage broker will go over everything with you to be sure you understand what you are getting and will tell you about any fees. They will also not be afraid to tell you what they aren’t able to do for you and will be honest and realistic about loan qualifications.

They Should Pay Attention To Details

Details are crucial when it comes to applying for a mortgage, and it’s a very complex process. A great broker needs to be sharp when it comes to those details, both big and small. They will make sure that your paperwork is filed in a timely manner and pay attention to timeframes. After all, one missed major detail can jeopardize the whole mortgage process. They will also make sure that you understand those details as well, and will keep you updated about any changes.

They Are Upfront With Fees

Some brokers are given compensation for using a specific lender. However, some private lenders will charge the homebuyer. A great mortgage broker will let you know of any upfront costs straight away so that you can decide if you want to go with that lender or not. If your broker seems to get nervous when you ask them about fees, it’s a red flag that they may not be telling you everything.

When you apply for a mortgage, your financial situation and finances are being accessed. These are personal and delicate areas of your life that you won’t want just anyone to have access to. This is why it’s so important to shop around for a good and reliable mortgage broker who will safeguard your information and who will work with your best interest in mind.

If you have questions about mortgage rates and are looking for a great mortgage broker, give our Grande Prairie mortgage broker team a call today!

Purchase Plus Improvements Mortgage Program

Mortgages Gert Martens 10 Dec

Mortgage Expertise with Gert Martens

Hi there! Gert Martens with the Gert Martens Mortgage Team. I’m here to talk to you today about purchase plus improvements.

What this program allows you to do is include the cost of renovations in your new mortgage. There are a couple of simple steps to follow with this type of mortgage.

First, you will need to get quotes for all of the work that will be included. You can provide quotes for the materials you will need for any work that you plan to do yourself, but please keep in mind, you will need to have savings or a line of credit to purchase the materials.

Lenders are looking for items that increase the value of the home and cannot be removed from the property. Appliances and/or luxury items (such as new hot tubs) would not be accepted by the lender as part of the purchase plus improvements program. They are looking for improvements that increase the value of the property. Examples of what they are looking for would include:

A new kitchen
New flooring
A new furnace
New roofing
New windows

These are all items that increase the value of the home and cannot be removed.

Once all of the quotes are provided, we will be able to submit your mortgage for approval. We do submit the total value of the quoted amount plus your purchase price. The downpayment is always based on the total amount.

Once you take possession of the home, you can begin the renovations. The funds for the renovation project will be held in trust with your lawyer. Make sure you know your lender’s time limits on the renovations. Generally, lenders allow up to 120 days to complete your project.

Once the renovation is 100% complete, you need to contact your mortgage broker and they will order an inspection to confirm all of the work has been completed. Some lenders do require proof of work completed via invoices from the contractor or receipts for your materials so please make sure you keep those documents handy in order to ensure those funds can be released to you.

Once your lender has confirmed the work has been completed, the layer will be able to release the funds for the renovation project. The most important thing to remember is that a lender will only allow the release of the funds once the work is 100% complete.

If you have any questions about obtaining a purchase plus improvements mortgage, don’t hesitate to give me a call today! I’m always happy to help!

Thank you for watching and I hope to hear from you soon!

 

The Difference Between a Second Mortgage and a Refinance

Mortgages Gert Martens 21 Nov

From your first mortgage repayment, you are building up the equity in your home. This equity can be used to borrow money when you need it. One question our Grande Prairie mortgage broker team is often asked is whether it’s better to refinance or take out a second mortgage. Both options have their benefits, but which you choose is dependent on your circumstances. We’ll look at the differences between the two to help make that choice.

Second Mortgage vs. Refinance: What’s the difference?

Second Mortgage 

A second mortgage allows you to borrow money against the equity in your home. You can either have the funds given to you in a lump sum or have the funds paid monthly through a line of credit. Second mortgages come in two types: Home Equity Loans and HELOCs.

Home equity loans allow you to borrow funds against your home’s equity. Payments are made as a lump sum that you then pay back through monthly repayments. You also get a fixed rate of interest, which means no unexpected rises in monthly repayments should interest rates go up.

A HELOC, of Home Equity Line of Credit, allows you to continuously access your funds. HELOCs tend to come with a variable rate of interest and you can access funds, or draw periods, once you have taken a HELOC out. This option lets you access funds up to your credit limit and the only monthly payments you will make are towards the interest for the first two draws. After that, you pay the balance off in monthly repayments.

Refinancing

A refinance replaces your current mortgage loan with a new one. Doing this will allow you to change lenders, get a new rate of interest, change the term of your mortgage, or opt for a different type of mortgage loan. Refinances come in two types: Cash-out and Rate and Term.

Rate and Term Refinance

With this option, you can change the setup of your loan without it affecting the principal. Taking out a longer-term will lower your monthly repayments and taking out a shorter term will let you pay the loan off faster, which saves you money on interest costs. You are also able to get a better interest rate should they drop lower than what you are paying.

Cash-out Refinance

This option lets you access the equity of your home while raising the principal. For example, your current mortgage loan is $150,000. You want to borrow $20,000 to make some home improvements. The new loan will be for $170,000 and you will get the $20,000 funding a few days after closing.

Pros and Cons

Let’s look at the pros and cons of each option.

Second mortgage pros:

  • You decide how you receive your funds
  • There are fewer closing costs
  • You can keep your current term and interest rate

Second mortgage cons:

  • You have a second lien on your property, so it’s a higher risk
  • Extra monthly repayments
  • Unable to change your mortgage terms

Refinancing pros:

  • You are able to change the term and rate of the loan
  • You only pay a single monthly repayment
  • Can get a lower interest rate
  • With just one lien on the property, it’s less of a risk
  • You may be able to tap into 100% of the equity in your loan

Refinancing cons:

  • Closing costs may be higher
  • there is a chance that you won’t be able to keep your interest rate

If you have questions about a second mortgage or refinancing, give our Grande Prairie mortgage broker team a call today!

Mortgage and Real Estate Market Update on the Alberta Area

Latest News Gert Martens 15 Apr

Our Grande Prairie mortgage broker team knows how unsettled the housing market has been with the current worldwide pandemic. Many business sectors are being affected and the housing market is one of them. It’s because of this that we can’t predict what the market will do in the next month or so, and we are waiting for March’s figures to see what impact the pandemic has had so far.

Normally, spring is a peak time for the housing market. In February, it looked like several areas of Canada were heading for a hot season, with the sale of homes close to 27% in comparison to this time last year.

 

Current Statistics

So far, for the Alberta/Calgary region, mid-March has seen home sales up at 7.5% from this time last year. The average time that homes have been spending on the market is 53 days, which is down by 17.19% from last year. The average sales price of homes is at $458,908, a drop of 2.13%, and the median price of homes is at $410,000, a drop of 1.86%. Mid-March saw an increase of 5.53% in new listings, which is at 1,83. Active listings are at 6,083, which is down 5.0%.

Areas like Heritage Point have had average sales prices of $1,066,891 with the lowest price being $639,900. In Strathmore, the average sales price is $504,750, with the lowest price coming in at $100,000.

 

Interest Rates

The Bank of Canada has slashed interest rates by half a percentage point to help the economy. This means a lot of people are considering applying for a mortgage now while the rates are down. For those who already have a fixed-rate mortgage, they won’t benefit from this recent drop. However, variable-rate mortgage holders will benefit from the drop. One word of advice, if you are taking out a mortgage now, is to not spend more than you can realistically afford. Things may be a bit cheaper right now, however, there are concerns about a slowdown in the global economy and the potential for lost jobs. It’s best to make certain that all of your income isn’t being put towards housing and lifestyle, and that you have an emergency fund.

 

Where Things are Heading

The issues we are having at this time are that many people are uncertain about their cash flow and jobs, making them think twice about investing in homes. Many sellers are wary about having strangers in their homes for viewings, and a lot of open-houses have been cancelled. In some countries, it has been advised that people refrain from moving home at this time.

Saying that realtors, sellers, and buyers are looking to technology to help with viewing homes. A lot of real estate agencies are starting to offer virtual tours to keep social distancing measures in place.

The actions that have been set out by the Alberta Health Services, Canadian Real Estate Association, and Albert Health are being adhered to in order to keep everyone safe at this time. For example, if an open house must be done, real estate agents are making sure that all visitors wash their hands before entering a home and refrain from touching any surfaces. They are making sure to wipe shared surfaces with disinfecting wipes. Other steps they are taking is to limit attendance for open houses to 1 group at a time, asking sellers to disinfect the home thoroughly after an open house, and are asking anyone who attends an open house to alert them if they start to show symptoms of Covid-19.

Saying that many have chosen to put house hunting and selling on pause for the time as we wait out the pandemic and it’s long term effects. Once the monthly figures have come in for March, we may have a better idea of where things are headed. For now, things haven’t come to a halt in the Alberta and surrounding areas housing market, but some experts are feeling that things will start to slow down as the pandemic reaches it’s peak in possible the next 3 weeks. Until then, realtors will do all they can to keep clients and potential buyers safe.

If you have questions about mortgage rates or want some advice, give our Grande Prairie mortgage broker team a call today!

 

5 Reasons to Work with a Mortgage Broker 

Mortgages Gert Martens 17 Oct

I deal with many clients, as a Grande Prairie mortgage broker, who has moved from going directly to a lender for a mortgage to using a broker. There are so many benefits to choosing a mortgage broker, whether it to buy your first home, take out a second mortgage, or renew your existing one to get a better rate. It’s important to find the right financing for your circumstances, and that’s something our Grande Prairie mortgage brokers excel at.

5 Benefits of Using a Mortgage Broker 

It’s not the same as it was in the old days, where you would find the home you want and then go to your local bank to take out a mortgage. People would accept the terms offered with no questions asked about getting better rates. A lot has changed though and shopping around can save you thousands of dollars of savings from interest rates. From getting lower rates to having more loan options to choose from, it makes sense to go to a mortgage broker.

You Save Time and Money

When you use a mortgage broker you aren’t having to apply to all of these lenders on your own, which can hurt your credit score. A mortgage broker does all the work for you and is looking out for your best interests. A broker also has access to a variety of lenders and mortgage packages that you won’t get from a lender. This means lower rates that can save you thousands over the life of your mortgage.

Keeps Your Credit Score Safe

When you apply to many lenders on your own it can impact your credit score. This is because each time you apply, the lender pulls your history, resulting in a hard check on your credit report. Too many hard checks in a short period will lower your credit score. When you use a broker they only pull your credit report once, which helps to protect your credit score.

Lower Rates 

Mortgage brokers tend to do a lot of transactions with certain lenders. This means they get volume bonuses that work to pass savings on to you as their client. A good broker needs to be an unbiased negotiator, which means they have a better chance of getting you better rates from a lender than you would if you went yourself. Not to mention, lower rates mean you will have payments that are lower too.

Unbiased Advice

As mentioned above, a mortgage broker works with many lenders and referrals from clients are indispensable. It’s in a broker’s best interest to give unbiased advice and make sure clients are satisfied. A broker should choose a lender and mortgage package that is suited to your needs and not because they were offered a finders’ fee or bonus.

Virtually No Cost

Mortgage brokers are compensated by lenders directly. This means that, in most cases, there will be no cost to you. There are some instances when you could be charged a fee is when going with a private lender that does not pay a broker fee. In these situations, a broker will tell you about this upfront so that you are aware of any potential costs to yourself.

You can see why it makes sense to use a Grande Prairie mortgage broker. If you are looking for a mortgage, give one of ours a call today!

 

Market Update – July 2019 

Mortgages Gert Martens 7 Aug

Market Update 2019 

Working as a Grande Prairie mortgage broker means keeping an eye on the real estate market.  Here in the Alberta region, I’ve seen a lot of ups and downs this year.  The outlook for the moment is stable but still struggling.  The bubble-like conditions in the market during 2017 made 2018 a real challenge as the housing market tried to regain its footing.  2019 has continued with this trend so far.

Between steadily rising interest rates and stricter rules for qualifying for a mortgage, it’s no surprise that the figures at the end of 2018 looked somewhat lacklustre.  The first half of 2019 saw a cooler market overall. So, how do things look for the second half of 2019?

2019 Market Update

It’s been predicted that the last two quarters of 2019 will see an improvement in market conditions.  The Bank of Canada had expected to raise interest rates quite a bit at the start of the year.  However, with the softer housing market, they had to reconsider.

There are a few factors that should affect the coming months in a positive way, such as population growth, immigration targets, a stronger job market, and steadier household incomes.  Hopefully, we will start to see people moving away from rentals and into the home buying market.   Of course, this may vary from one area to the next.

While we have seen prices lowered for homes and sales up in areas like Vancouver, Ottawa, Toronto, and Montreal, a less positive picture has been painted for Alberta.  In Alberta, the market has continued to struggle due to the effects of oil prices dropping and the energy sector struggling.  In January, we saw resales hit an 80-year low.

For Buyers

The outlook for buyers for the rest of 2019 continues to remain the same, with prices slowly climbing and pressures on affordability sticking around.  Overall, the number of Canadian looking to become homeowners within the next 5 years has dropped from 48% in 2018 to 36% in 2019.  Many feel the mortgage stress test is to blame for this though.

The number of new mortgages in 2018 dipped to 11.9% and with many homebuyers being unable to qualify for mortgages, we will see a continuation of this.  If you are looking to make a purchase this year be sure to keep an eye on mortgage rates.

For Sellers

For the remainder of 2019, we should see home prices rise by about 1.7%.  There could be fewer buyers looking for homes and lower home values.  This is quite the change from 2017 when we saw prices spiraling and bidding wars.

It would be a good idea for sellers to strategize how to best market their properties, so find out as much as you can about home prices in your area before sticking them on the market.

Current Homeowners

For those who own homes and are nearing renewal time, the remainder of 2019 could be tricky.  Should they stick with their current lenders, they won’t have to deal with the mortgage stress test but will miss out getting a better rate with someone else.  Homeowners looking to switch lenders will need to consider if they want to go through the mortgage stress test.  The more homeowners that decide to stay with their lenders, the lower the incentive will be for banks to offer renewal rates that are lower to gain new clients.

Where interest rates are concerned, since the Bank of Canada hiked up rates a year and a half ago, we will start to feel the impact in the months ahead. According to the Office of the Superintendent of Bankruptcy in Canada, October of 2018 saw a rise of 9.2% in insolvencies.  This looks like a trend that will continue for 2019 with a lot of homeowners struggling to keep on top of their mortgage payments.

If you are looking to apply for a mortgage or renew with someone else, give our Grande Prairie mortgage brokers a call today to see what options are there for you.

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