After a fairly quiet winter, the Canadian housing market is starting to heat up, and just in time for the spring buying season. According to the Canadian Real Estate Association, the national price for a home in March climbed six percent year-over-year to $401,417.
While rising home prices in a competitive market are a boon for sellers, they can be frustrating for first-time home-buyers, especially when coupled with low inventory levels.
While mortgage rates continue to hover below three percent, many home buyers are more motivated than ever to step onto the property ladder. However, there’s a lot to consider before going out and buying the welcome mat.
The lending experts at Canadalend.com can help you determine from the outset what you can afford; that means more than just interest rates and monthly mortgage payments. Many potential home buyers forget about some of the additional costs that go into purchasing a home, such as closing fees, the land transfer tax, GST/HST, legal fees, and inspections.
If you have a down-payment of less than 20%, you will have a high-ratio mortgage, which requires you having to pay a one-time insurance premium based on the amount of the mortgage.
Plus there are ongoing expenses you need to plan for, including homeowner insurance, property taxes, utilities, home maintenance, and, if applicable, a condo or homeowners’ association fees.
The independent, licensed agents at Canadalend.com will also look at your other debts, including loans, lines of credit, and credit cards, and help determine your debt-to-income ratio to make sure you don’t get in over your head.
They’ll also help you figure out both the amortization period and which kind of mortgage is best suited to your lifestyle needs. Do you want a fixed-rate mortgage or a variable-rate one? With a fixed-rate mortgage, the interest rate remains the same throughout the term. Many homeowners like the consistency of a fixed-rate mortgage.
On the other hand, with interest rates still near historic lows, maybe you’d rather consider a variable-rate mortgage. A variable-rate mortgage fluctuates with the prime rate throughout the mortgage term; the monthly payment will remain consistent, but the amount of principal that you pay off each month will differ.
How long do you want to take to pay off your mortgage: 15, 20, or 25 years? The longer the period, the lower your payments, but that also means more in interest.
That doesn’t mean you’re locked in at that rate for good—finances change. A Canadalend.com agent can help you renegotiate the mortgage when the term expires; that could mean changing the payment schedule or shortening the amortization period.
Getting a mortgage can be confusing, but it doesn’t have to be. For more information, contact Canadalend.com today or apply online to find out how an independent, licensed Canadalend.com agent can make getting a mortgage both easy and stress-free.