Having a mortgage is one of the long-term investments with some financial fruits in the future. Before you shop for a mortgage, you’ll need to consider a few items to make sure you have a smooth application process that won’t ruin your investment plan. Having a pre-approved mortgage is one of the most popular ways to get a mortgage at the best cost. This is because you should have an understanding of the monetary quantities and the constraints in which you have to work before the actual application is submitted. If you’re within your range, you shouldn’t be disappointed.
Though each country has its laws and regulations, there are many mortgage plans in Canada that one can choose from. The first is variable-rate mortgages, where interest rates differ based on certain economic factors. It is also possible to receive a fixed-rate mortgage where the mortgage is paid at a constant interest rate, meaning that payments are still regular. Canadian mortgage providers are beneficial, so it is easy to customize the mortgage to get the best mortgage rates.
Having a mortgage allows you to have specific documentation that can inform you about your financial health. The first one you’ll need is a pay slip from the last few months. The second records are the tax returns of the previous two years. The third is your credit card statement, which will include details about your financial health. You would also need to check your marital status and whether you have a family to support. Last but not least is your chosen monthly schedule. This is because the financial institution takes into account the amount of monthly payment that you would always have to make to maintain a balance between your revenue and your expenditure.
Some factors will have an effect on your suitability for the best mortgage rate. It is also best to get your financial house in order before applying for a mortgage. The first thing to do is to rate your credit card. Several offices can help you test your credit score scores. If you’re reading correctly, the chances of having the best mortgage at a lower rate are small. This is because your debt-to-income ratio is low. If your credit card reading is good or not so bad, the mortgage provider can increase your mortgage rate.
After you’ve adjusted your credit score, the second move is to verify with your property whether you’re securing the mortgage on it. Mortgage lenders can take home as their preferred collateral. Certain parts of a home depreciate over a time-an older home that needs to be fixed. It’s worth making these repairs several times before applying for a mortgage. The house’s value on the current property market will be measured to decide how much it is worth. This can be measured using online devices such as electronic home valuation calculators. The resultant value that you have achieved is now an estimate of how much the house will get.
LACKIE: There are signs of a softening real-estate market – Toronto Sun
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How could house-poor Canadians, already saddled with alarming levels of consumer debt, manage their way through this, let alone out the other side?
But they did. And it was, quite frankly, astonishing.
According to CMHC, Canadians deferred $1 billion worth of mortgages per month during the pandemic, while the Canadian Bankers Association reports that more than 760,000 Canadians either skipped a mortgage payment or took advantage of a deferral program.
As of Sept. 13, more than $78 billion had been paid out to Canadians in the form of the Canada Emergency Response Benefit.
Yet, by the time the emergency lockdown restrictions started to relax, the real estate market was in full swing.
The June and July sales figures broke records set a year earlier, and the Toronto market spread its heat to the suburban and rural markets. In cottage country, properties were selling with multiple offers just hours after hitting the market.
Could this really just be the result of pent-up demand? Of fundamental changes in consumer appetites? A hunger for more space, more land, less density?
There were tons of theories.
Maybe all along we haven’t fully appreciated the level of demand, I wondered.
Maybe people weren’t as hurt by lost earnings as one might have expected?
Maybe the busy summer was the combined effect of insatiable demand met with people hustling to get set up to more comfortably ride out the fall’s all but guaranteed second wave.
Why real estate prices continue to rise despite the pandemic – CBC.ca
Last May, I wrote an opinion piece titled Time to buy? What the pandemic means for Vancouver’s real estate market where I explained that historically for every one per cent rise in unemployment there is a four per cent decrease in housing prices.
However, this is not what has happened during the last several months. Between February and August this year the unemployment rate doubled while the Canadian housing market hit all-time highs.
Homeowners who lost their jobs due to the pandemic were able to keep their homes thanks to various government income replacement programs and banks offering the option to defer mortgage payments. These initiatives bought struggling homeowners some time and allowed them to keep their homes off the market.
At the same time, interest rates dropped.
This lowered the cost of borrowing for buyers and increased the amount of “house” they could qualify for. The lower rates increased demand at a time when supply was relatively low and, as a result, despite unemployment numbers doubling, the prices of real estate hit new highs.
Several factors will affect upward trend
Whether the upward trend in real estate sales and prices continues will depend on several factors, such as: the severity of future waves of COVID-19; how quickly the economy can recover; and when our borders will reopen to immigration. However, what will have the most impact will be government action and the policies they implement to keep Canadians and the economy afloat. As long as government aid is flowing — which I think will continue until we have a vaccine and/or the economy is back on track — asset prices can keep rising.
Financially, on average, Canadians are in better shape now than they were pre-pandemic. Household spending has dropped by 13 per cent, which has increased our savings rate by 28 per cent. The government income replacement programs were effective, but it appears they overshot a bit as for every dollar in salary lost due to the pandemic, the government replaced it with approximately $2.50.
Now that these programs are being dialled back, it will be interesting to see how the changes will affect the economy and housing market.
As for the seven per cent of B.C. mortgage holders who deferred their payments, I don’t think many will default on their mortgages. Some deferred not because they needed to, but because it was an option and they felt it prudent to save money just in case things turned really bad.
Others deferred due to temporary job loss, but then the government programs helped fill their income gap until they could return to work.
In both these cases, most of these mortgage holders should be able to resume their payments.
Homeowners at risk
Unfortunately, there are some homeowners who remain unemployed and may have to sell their homes once their mortgage payment deferral option comes to an end.
For those forced to sell there is at least a silver lining in that real estate prices have gone up, putting them in a better position today than six months ago.
The group I consider most at risk are condo speculators.
There has been a fundamental shift in what is deemed desirable in real estate. Now that the work-from-home movement is no longer a trend but a necessity, living close to your workplace isn’t as important as it used to be. The items that are on top of today’s buyers’ wish lists include a backyard and an extra room for a home office.
Many people are selling their downtown condos and purchasing houses in the suburbs.
As a result, we have a tight detached home market while new listings for condos are surging — a trend that I can see not only continuing but accelerating in the near term.
This column is part of CBC’s Opinion section. For more information about this section, please read our FAQ.
United Property Resource Corporation unlocks value of real estate assets held by Canada's largest land owners – Canada NewsWire
The Canada Mortgage and Housing Corporation (CMHC) is providing UPRC with a $20 million line of credit through the Affordable Housing Innovation Fund to be accessed for pre-development and pre-construction costs as it builds affordable housing across Canada. UPRC is committed to building a minimum of 5,000 new affordable housing units across the country over the next 15 years. This creates significant opportunity to repurpose assets and build sustainable communities.
UPRC has committed to ‘be building’ 1500 affordable units by 2025 and 5000 affordable units by 2035. That translates into approximately 20,000 new rental units within the same time period as many of these developments will be mixed income and mixed use ensuring much need community space will be incorporated.
“This is one of the largest opportunities to reimagine what our neighbourhoods could look like over the next 15 years and the common good that repurposing real estate can have on communities,” said Tim Blair, CEO, United Property Resource Corporation. “UPRC represents an exciting opportunity to fill a gap in the housing market across the country and advocate for progressive real estate models that are inclusive, environmentally and financially sustainable. None of this would be possible without the support from our partners; we are grateful to the Federal Government, and The United Church of Canada for their vision and commitment.”
UPRC will focus on providing affordable housing for Canadians in a range of housing types including housing for families. Many of UPRC’s projects will broaden housing choices, creating a unique opportunity to fill the “missing middle”, a range of housing types between single-detached houses and high-rise buildings that have gone ‘missing‘ from many of our cities in the last 60 to 70 years. As cities struggle to find ways to broaden housing choices, create walkable communities, and remain economically competitive, the ‘missing middle‘ is increasingly part of the discussion about intensification, complete communities, housing choices, and housing affordability.
The UCC undertook a national property inventory, in partnership with the CMHC, to assess the total real estate portfolio and create a strategy. The creation of a development corporation – UPRC – was a key tenet of the strategy.
“It’s incredible to see this vision come to fruition in the UPRC and to see the tremendous value it will bring to communities of faith across Canada,” said Nora Sanders, General Secretary of The United Church of Canada. “In the language that communities of faith would use, ‘this is the abundance that is available to create the world that we want to see'”.
The team of experts that make up UPRC today bring expertise in planning, development, investment banking, and business development. It has established partnerships with CMHC and The United Church of Canada.
Founded in 2019, UPRC brings professional real estate development and management expertise to communities of faith and non-profits to assist them in making astute decisions about their real estate while making lasting contributions to their communities. The development corporation collaborates with both public and private partners. To find out more, visit www.uprc.ca.
SOURCE United Church of Canada
For further information: For more information, Backgrounder, Facts & Figures and Bios, please contact: Laura Currie Ryder, 416-317-9447, [email protected]
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