9 Aug

Market Update on the Edmonton, AB Area

Edmonton Mortgage Broker

Posted by: Vaughn Leroux

The 2018 real estate market in Edmonton was quite a challenge for both buyers and sellers due to a record-high amount of homes for sale.  As an Edmonton mortgage broker, I have to keep tabs on trends and quarterly reports for 2019 in order to give my clients useful information and updates. The Realtors Association in Edmonton has predicted that there will be further drops in average prices and sales as we continue through 2019.

It’s a bit of a double-edged sword for buyers at the moment.  On one hand, this is a good time to buy because of the level of inventory.  On the other hand, it’s not the best time as a result of the federal mortgage stress test, which has made it difficult for some buyers to qualify for mortgages.  It seems both buyers and sellers are needing to be a bit patient for now.
 

High Inventory, Low Sales

The higher level of inventory on the market now is a result of properties last June taking longer to sell with a record number of 10,000 homes that came into the market.  In average, last June it took 62 days for a home to sell.   So, this current decrease in demand and increase of supply has created downward pressure on prices that looks to continue into the 2nd half of 2019.

For duplex and single-family homes, sales are forecasted to remain stable as we move through 2019, perhaps having some slight declines in units sold and the average prices.  The market is expecting single-family homes to have an average price of around $428,900, which is down from last year’s $434,028.
 

Trouble for Condos

Where condos are concerned, things have been struggling along and it looks like this will continue through 2019.  It’s expected that there will be a 2.06% drop in sales, in comparison to the 4,000 units sold this time last year.   In 2018, condominium prices hit a 5-year low with a 4.69% drop.  It is expected that it will drop a further 1.63% during the remainder of 2019.

There are a few factors involved with the falling market, such as the energy sector experiencing recent hits.  Situations in Alberta are having a knock-on effect with everyone.  It’s also expected that we won’t see any major improvements economically until the end of this year, but it is not believed this will be a result of a booming energy sector.
 

What Lies Ahead

It is expected that, by the end of 2019, we will see a housing market that has become more stable.  Part of this will be down to interest rates and the economy stabilizing.  The Bank of Canada has recently announced its decision to maintain the 1.75% benchmark, which will give many people that push needed to move into the housing market rather than just sitting on the fence.

For both potential buyers and sellers this year, there doesn’t seem to be any immediate cause for concern.  However, patience will be needed.  It isn’t a case of nothing selling because properties are moving.  It’s just happening at a slower pace.

One detrimental aspect has been the federal mortgage stress test, which is causing less movement than needed in the market.  However, the new addition of housing incentives for first-time buyers in the recent federal budget may help to balance things out a bit.  How it will affect things in the market is a bit uncertain for now.

If you would like to know more about what is happening in the market in your area, give your trusted Edmonton mortgage broker a call today!

7 Jun

Different Mortgage Terms in Canada

Edmonton Mortgage Broker

Posted by: Vaughn Leroux

Different Mortgage Terms in Canada

Choosing a mortgage term is something your Edmonton mortgage broker can assist you with. The term of a mortgage is the time frame that you are committed to a certain lender, mortgage rate, and any conditions set out by the lender. There are a number of mortgage term options that you can choose from when securing a home mortgage. It can be a bit confusing, however, to know which terms will be most beneficial to you.

Speaking with an Edmonton mortgage broker, we found that mortgage lengths can run from 6 months up to 10 years, with many customers going for a 5-year mortgage. In Canada, when a mortgage term expires, you need to renew the mortgage on the principle that remains unpaid. Many customers will choose to renew their mortgage terms several times through the whole of the amortization period.

Choosing a Mortgage Term

Depending on your financial situation, tolerance risk, and your long and short-term goals, choosing the right mortgage term is important. For example, choosing a mortgage term that is longer will ensure that you are locked into an interest rate that will be good for a longer time frame. With a short term option, you get a bit more flexibility, however, there is less protection if interest rates rise.

Personal Circumstances

You should consider your personal circumstances when choosing a mortgage term. For example, should you feel there is a good chance that you will be selling your home in the next few years, choosing a short mortgage term would be beneficial. It will help you avoid paying prepayment penalty fees that you would be hit with if you had to break a longer mortgage term.

Interest Rates

Something to bear in mind is that whichever mortgage term you go with will have a direct effect on your rate of interest. To date, its shorter-term mortgages that have lower rates of interest. The longer the term you choose, the more protection you have against fluctuations in interest rates. However, you will have to pay your lender a premium for this.

Qualifying

Mortgages in Canada are subject to what is known as a stress test. This means that a home buyer needs to qualify at a higher interest rate than what is given by their mortgage lender. This is usually 2 percentage points added to the rate your lender offers you.

Breaking a Mortgage Term

There are times when your personal situation changes, such as having to relocate, refinancing, or another major life event. This may mean that you have to break the term of your mortgage early, which can result in having to pay a significant penalty fee for prepayment.

There are some alternative though to breaking your mortgage term, such as porting your mortgage to your next home. Another option is having the buyer of your home assume the current mortgage. Speaking to your Edmonton mortgage broker about which terms are best for you and how to avoid these prepayment penalties will save you thousands in the long run.

15 Apr

Edmonton Residential Market Update

Edmonton Market Update

Posted by: Vaughn Leroux

The springtime is approaching, which means the snow will soon be melting, the flowers will be blooming, and numerous homes will be available for purchase all throughout the province. Spring and summer months are said to be the peak season for home buying. Few sales are made throughout the winter and most seller’s wait to put their homes for sale until April – June.

Therefore, if you are interested in becoming a homeowner, then now is the time to start getting your finances in order and schedule an appointment with your Edmonton mortgage broker today. That way you will be prepared before you start viewing different homes on the market.

So, to help you get started, your local broker, Vaugh Leroux with Dominion Lending Centres, has listed the most recent market update for the Edmonton region.

 

Edmonton Market Update

Zolo.ca is one of the top real estate marketing websites and has some of the most reliable data. According to their statistics, the current average sold price for all property types in Edmonton is $353,000. This is a 0.1% increase over the past 30 days, but it is a 4.9% decrease in price since this time last year.

With the Edmonton mortgage rates currently lower now than they have been in the past, there is no better time to lock in a rate than now. Real estate experts are predicting that the housing market is going to increase over the next few months, which means housing prices will be more expensive and rates will go up. Therefore, lock in a rate now to take advantage of these recent low prices.

In reference to the housing inventory in Edmonton, there have been 1,329 new listings posted in the past month and during that time, 596 homes have sold. Properties also spend an average of 46 days on the market and the selling to listing ratio is at 97%.

Edmonton has a very healthy residential market and would be an excellent investment for your future, as well as a great place to settle down in.

 

Contact Us

If you would like to receive more information on the current market update or if you are ready to begin your application for an Edmonton mortgage, please contact Vaughn Leroux with Dominion Lending Centres at 780-431-5600.

8 Feb

Tips for Raising Your Credit Score

Edmonton Mortgage Broker

Posted by: Vaughn Leroux

The New Year is officially here and 2019 is all about achieving your goals and making your dreams come true. So, if you have always dreamt of owning your own home then now is the perfect time to make that happen.

Interest rates and housing prices are at an all-time low, which means if you act now, you could benefit from these affordable rates.

If you are still a little hesitant on taking the plunge into homeownership because your credit score is a little low, then do not worry because your Edmonton mortgage broker, Vaughn Leroux with Dominion Lending Centres, has listed some useful tips on how to raise your credit score.

 

Tip #1: Pay Off High-Interest Loans

Once you begin the application process, you will see that your income and credit score make a huge impact on whether or not you can qualify for a mortgage, as well as what home loan rates you might receive. So, in order to get the best Edmonton mortgage rates, it is important to raise your score as much as possible. A useful tip to do so would be to pay off high-interest debt.

Credit cards typically carry the largest interest, so if you could pay off your credit cards as much as possible before you begin the application process, this could help improve your score.

 

Tip #2: Make Payments On Time

Nothing can hurt your credit worse than failing to make a payment on time. If you have a hard time remembering when a loan payment is due, set a reminder on your phone to go off every month so you never forget. By making regular payments on time, this can help improve your credit and thus have a better outcome on your Edmonton mortgage application.

 

Tip #3: Avoid Opening Up Additional Lines Of Credit

Don’t fall into the new homeowner trap where those who buy a new home feel like everything else they own has to be new too. Instead, put off making any additional large purchases until after your loan has been approved for because every time you apply for a new line of credit, your score will drop, even if only temporarily.

 

Contact Us

For additional details on how to raise your credit score or to get started on your application for an Edmonton mortgage, please contact Vaughn Leroux at 780-431-5600.

4 Sep

How To Consolidate Debt With Equity In Your Home

Debt Consolidation

Posted by: Vaughn Leroux

Having extreme amounts of debt is something a lot of Canadians are facing today. Reviewing your finances and talking with an Edmonton mortgage broker can help you figure out what the best way is to go about paying off your high-interest debt.

So, to provide some guidance, Vaughn Leroux with Dominion Lending Centres, has explained how you can consolidate your debt with the equity in your home.

What Is Equity?

If you are a current homeowner, chances are you have started to accumulate some equity in your home over time. Equity is the difference between your home’s appraised value and the balance you owe on your Edmonton mortgage. Therefore, the more payments you make towards your loan, the more equity you will have.

Another way you can build home equity is with time. Most homes appreciate in value, which means they become more valuable over a period of time. Thus, the longer you are in your home, the more equity you could have.

How Equity Can Help Consolidate Debt

If you have at least 20% of the equity in your home, you could obtain a second mortgage. This is where you take out another mortgage on your house, in addition to your primary mortgage.  With a second mortgage, you borrow against the value of your home that you owe, which would be your equity. So, the more equity you have, the more money you could borrow.

You could then use this money to pay off high-interest loans, such as credit card loans. Edmonton mortgage rates are significantly lower than the interest on credit cards, so if you obtain a second mortgage, you could have your loans consolidated into your second mortgage and have cheaper payments. That way you only have to worry about making payments every month for your first and second mortgage.

Second Mortgage Requirements

To qualify for a second mortgage, you need to be sure and have at least 10% equity in your home. You will not be able to qualify for a second mortgage if you owe too much money on your first mortgage. So, if this is the case for you, pay off your loan more before you begin the application process. Also, be sure and have a good credit score and a sufficient amount of savings.

Contact Us

For more information on how to consolidate your debt by using the equity in your home or to begin your Edmonton mortgage application, please contact Vaughn Leroux at 780-431-5600.

14 May

New Canadian Mortgage Rules

Edmonton Mortgage Broker

Posted by: Vaughn Leroux

 

Congratulations on making the decision to buy a home. Before you get started, you should be informed of the new Canadian mortgage rules. As of January 2018, these new rules have been enacted, which could affect your finances. To help you get a better idea of how the new rules affect Edmonton mortgage rates, Vaughn Leroux at Dominion Lending Centres has described the recent changes below.

Stress Test

The new Canadian mortgage rules include a mandatory stress test for all new and existing homeowners. The purpose is to see if you can financially handle a rise in interest rates without accruing more debt and stretching your finances too far.

Mortgage debt is a major issue throughout Canada and could greatly affect the entire financial system. To prevent and system-wide problems,  the government decided to implement a stress test to reduce the amount of mortgage debt homeowners are carrying and to help cool down the residential market.

Showing you can make payments with an increased rate will be determined in one of two ways:

  • Using the Bank of Canada five-year benchmark qualifying rate of -5.34% or
  • Using the mortgage rate you are offered by your lender plus an additional 2%

Who is Affected?

Anyone who is looking for a mortgage is affected; this includes those who already have a first mortgage and would like to change banks when their loan period is up. Even if you pay 20% or more towards your down payment, you still are required to take the stress test.  However, you are not affected by these new rules if you wish to renew or refinance your Edmonton mortgage with your original lender.

Financially, the new stress test has been affecting Canadians affordability by as much as 15%. We recommend getting a pre-approved mortgage to determine your options.

Contact Us

For more information on the new Canadian mortgage rules, or to see if the stress test affects your finances, please contact your local Edmonton mortgage broker at 780-431-5600.