Like every economic ebb, there will be a flow. The economy right now is in a slump, but it will definitely pick up again. Therefore anyone who is looking to buy a home right now has some powerful advantages on his or her side. This is especially true for the first-time buyer who is not saddled with getting out of an upside down mortgage or selling a home before they are financially able to get another one.
The Bank of Canada rates are around 4% right now, which is a phenomenally low interest rate. This equals big savings for anyone taking out a mortgage right now. If you qualify for the best rate possible you will find that your mortgage payment is much lower than you would have expected. These rates, some of the lowest in many years, are making many consider home buying as an affordable alternative to renting for the first time ever. Don’t consider waiting for interest rates to drop further. If the interest rate is the only thing holding you back, then you need to move forward.
Even though there are particular populations where the economic impact has not taken its toll, for the most part, home sellers throughout Canada are waiting longer before a buyer comes along. This means prices lower and sellers become eager to sell. This creates a buyer’s market where the purchaser has more power than the seller. For new home buyers this is the ideal situation because home owners will be more likely to negotiate price, accept a lower offer and throw in extras to seal a deal. Many real estate markets throughout the country have much higher supply than demand for houses now, so the time to move on it is at hand. Get those deals while you can.
Mortgage companies are also willing to let you carry a high ratio mortgage, in exchange for a high ratio mortgage insurance premium. This protects the mortgage lender from losing his money should you default on the loan. For you it is an added expense, but one that can be dropped after you pay off a certain percentage of the home or the value of your home increases. In a market where homes are going for lower than the values they held a mere year or two ago, a price rebound is eminent. You may even be able to remove the mortgage insurance premium when the market goes up again.
If you are a first time homebuyer, no doubt you have concerns and worries. Information in the media can easily intimidate even the most seasoned professionals. Rest assured that this lull in the Canadian real estate market is temporary and in comparison with many markets in the United States is very mild. The pendulum will swing and we will once again be in a seller’s market with rising mortgage rates. Take advantage of the best deal you have seen in years and get the home of your dreams now.