Yes, we’ve only just started February and it’s still the middle of winter, but next month is March and that means the start of spring. For anyone wanting to buy or sell a home, it’s a very important time of year. As the weather warms up, the real estate market heats up into its busiest season.
It’s All About Mortgage Rates
It’s widely known that record-low mortgage rates have been the driving force behind the hot Toronto & GTA real estate markets of the past few years. The result has been record prices for homes in the area. In Markham, the average price of a home rose by 14.8% in 2014 and 15.3% in 2015. The average price of a detached home is Markham is now well over $1,000,000.
You need to pay close attention to mortgage rates whether you’re buying or selling a house. Just a quarter-point change can shift mortgage payments hundreds of dollars a year and be the difference in how quickly you sell your home, or whether you can afford the one you want to buy.
As the busy spring season approaches, we all start to look at mortgage rates to get an idea of what to expect. For the first time in four years, the Bank of Canada lowered its prime interest rate in 2015, and it did so twice. The rate now stands at .5%.
The mortgage rates follow the prime rate closely, but not always. Many of the major banks were criticized recently for not lowering their overall mortgage rates in line with how much the Bank of Canada lowered its rate.
It’s Not All About the Big Banks
Fortunately, Canada’s major banks are not your only source for mortgages. Many other financial institutions, like credit unions and mortgage companies, offer reliable mortgages at rates that are often lower than at the big banks.
As spring approaches, all those lenders begin to compete with each other to capitalize on the busy real estate season.
This year, the first off the mark was Meridian Credit Union who lowered their rate early in February to 1.69% on a one-year fixed-rate mortgage.
But by the time you read this post, there’s a good chance that others may have joined the fight for your business and rates may be even lower
How to Get the Best Mortgage Rate
It’s difficult for home buyers to keep track of all the shifts in mortgage rates from so many different lenders. But it can make a huge difference in your monthly payment and the total amount you pay for your home before it is fully paid off.
Mortgage brokers constantly scan the market for the best mortgage rates. There are a number of variables, including length of the term, amount to be financed, fixed or variable rates, etc., that affect the mortgage rate you pay. A reliable mortgage broker is skilled at finding the lowest for the particular mortgage you want.
The Importance of Mortgage Pre-Approval
Finding the right home is just the first stepping in actually owning it. When you do spot the home you want, you need to move quickly to improve your chances of closing the sale. If you have to wait to find out about getting the mortgage you need before being able to buy a home, it could be too late. Also, if you wait until the last minute to get your mortgage, you may not have the luxury of “rate shopping” to minimize your mortgage payments.
By getting pre-approved for a mortgage before you begin house hunting, you’ll be able to pull the trigger on the right deal when it comes along.
If you need to find a good mortgage broker or want to learn more about getting the best rates, please let the Stephen Tar Team know. We’d be happy to answer any questions and point you in the right direction.