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When it comes to finding a home in or around Toronto in the current real estate climate, it can be easy to get discouraged. Here are some important aspects to look for, procedures to follow, and matters to discuss when searching for a new home.

Set a Firm Budget 

Figuring out how much you can afford to spend is the first step necessary before house hunting, factoring in a down payment and monthly mortgage payments going forward. Most people require a pre-approval from a reputable financial institution to increase their chances of making a quick offer upon finding a home they wish to buy. As bidding wars may ensue, avoid the temptation to increase your spending limit beyond the parameters you and your lender have set. Chances are, it will be rejected anyway.

Keep an Open Mind on Location

As a commuter city, with growing traffic congestion but increasing efforts to improve public transit, many Toronto residents live over an hour away from where they work. If having three bedrooms and two bathrooms, a garage and driveway, backyard, and possibly even space for a rental unit in your garage are top priorities, you may need to compromise on geography.

However, there are many areas impressively developing beyond the central and downtown borders. The city has numerous pockets growing in both popularity and population. Pay attention to schools, restaurants, and other amenities in the neighbourhood, as well.

Find the Right Realtor

A professional real estate agent will have significant expertise, and greater insight into what homes are available, demographics, and price patterns both in buying a new home and—if applicable—selling your current one.

As with most major financial matters, while you may not require the help of a professional, it is often better to receive advice from someone with industry knowledge. Overall, they can help you find the right home within your budget and in a suitable location.

While the housing market has fluctuated in the past year, the condo market seems to grow steadily stronger. Real estate across the city is valuable, but mostly condominium owners have reaped the largest benefits. As demand increases, so does the supply. So how can people still charge so much for what is often so little space?

Relative affordability

When it comes down to it, condo units are often still more affordable options than homes and theoretically require less upkeep than homes. Many people appreciate not having to make their own decisions or worry independently when it comes to replacing or repairing certain aspects, such as a roof or windows. Condo unit owners are also not responsible for regular, simple maintenance such as mowing a lawn or shoveling snow.

Easier maintenance

Maintenance fees are a monthly payment required in a condo, but they vary from building to building and tend to rise only gradually. Further, they are meant to cover the cost of such repairs and replacements that tend to naturally occur in a home over time. Rather than it being the sole responsibility of the owner of a house, however, in this case, it is a shared responsibility of all condominium unit owners.

Security and community

There is arguably an increased sense of security living in a condo compared to a home, with cameras and possibly concierge in place to monitor any suspicious activity. This fosters an added familiarity and trust among residents who live in the building.

Units also closely neighbour other units to incite a sense of community, with residents sharing a variety of possible built-in amenities, such as an exercise room, swimming pool, games room, and theatre space. It is also helpful to have commercial businesses typically within walking distance or even right below a condominium.

Amenities vs. Square Footage

While houses offer greater autonomy, there is no question that condominiums offer a greater ease to homeownership. While incurring fewer responsibilities to maintain one’s property, residents can also take advantage of more security and social opportunities. Even though square footage may be an issue, having common use spaces arguably extends one’s feeling of home.

When your finances do not measure up to the standard requirements of being pre-approved for a mortgage, some people may not know where to turn. Acquiring bad credit can be detrimental to various aspects of your life, but especially when striving to obtain a home equity loan.

Although individuals with bad credit may not qualify to go the traditional route with a large bank, there are mortgage brokers, financial institutions and private lenders who work with people in these specific circumstances. They offer enhanced flexibility and freedom, in fact.

It is recommended to check your credit score before seeking a mortgage or home equity loan if you are worried that yours may be low; this can be done free of charge in Canada through TransUnion and Equifax, as well as some newer service companies like Mogo Mortgage and Borrowell. Someone with bad credit typically has a credit score below 600 out of a possible 900 (the lowest is 300).

While technically considered average, a score between 600 and 700 can be eligible for a bad credit mortgage if an individual has solid income sources—which is more difficult for those who work on commission or work for themselves, but still possible to determine a projection of how much you will make based on your averages.

A reputable lender can provide a bad credit mortgage or home equity loan despite their client having a lower credit score. However, it is equally important for that individual not to look far beyond one’s means for a home to avoid being unable to make mortgage or home equity loan payments moving forward.

Someone with bad credit must have solid approval of their property to assure it is in average to good condition. Although individuals can still obtain a bad credit mortgage, they may be sanctioned with greater interest rates and extra fees from lenders and mortgage brokers as a result. Whether good or bad, a person’s credit is considered a direct reflection of how risky they are considered to loan money to.

The mortgage renewal process is not as straight forward as it used to be. After the 2008 recession, the Bank of Canada lowered interest rates to essentially zero, making it really cheap to borrow money. It also meant that when it was time to renew your mortgage, you simply auto-renewed it. A lot has changed over the last 10+ years. The housing market in the Greater Toronto Area remains strong, interest rates are up, as are mortgage rates. Where it once made sense to auto-renew your mortgage or break your mortgage and switch to another lender, that’s not necessarily the case anymore. The convenience of auto-renewing is no longer a convenience. In fact, homeowners looking to save money come renewal time will need to make a little extra effort.

To find out how you could save thousands or even tens of thousands of dollars, read the following recent trends and tips on the mortgage renewal process.

Mortgage Stress Tests

As of January 1, 2018, everyone refinancing or looking to get a mortgage, from a federally regulated financial institution, like the big banks, has to pass a mortgage stress test. The stress test ensures you can afford the mortgage you qualify for if interest rates rise.

If you’re applying for a five-year fixed mortgage, you need to qualify for a loan with an interest rate that is higher than what the bank is willing to give you. The rate is two percentage points higher than the Bank of Canada’s five-year benchmark rate.

Previously, those who had less than a 20% down payment had to pass a stress test, but it was set at the Bank of Canada’s five-year rate, which is a little less strict than the new one.

New Mortgage Rule

Switching lenders has become increasingly more difficult. Many homeowners believe the current stress test only applies to first-time homebuyers. It doesn’t. It applies to virtually everyone.

You can take your mortgage to another lender to get a better rate, but you’ll need to pass the stress test all over again.

If you’re renewing your mortgage, you can avoid the pain of passing the stress test by sticking with your current lender. That might sound like a good idea, but it’s not. This prevents you from shopping around and securing a better rate.

Interest Rates Are on Their Way UpRecent Trends and Money Saving Tips for Canada’s Ever Evolving Mortgage Renewal Process

For more than 10 years, Canadians have been living in an environment where interest rates were essentially zero. Those days are over. Interest rates are on the way up. As a result, you can no longer expect rates to be lower when it comes time to renew your mortgage.

Those rising mortgage rates will affect the vast majority of homeowners. That’s because a quarter of fixed mortgage rates are due for renewal every year. Every four years, all households with a fixed mortgage will have to deal with higher interest rates.

Do Your Research and Start Shopping Early

The more informed you are, the better your chances are of getting better rates and terms when it comes time to renew your mortgage. That’s why it’s so important to do your research.

One of the first things you can do to ensure you get the best deal on your mortgage renewal process is to start shopping early. Time is of the essence. If you think you are going to stay with your current lender, most will let you renew early without penalty, but only if you renew in the final 120 days of your mortgage term.

In this competitive market though, chances are good your current lender will not be able to give you the best mortgage rate. Not only that, banks provide different rates to people depending on financial situation and the property you own.

That’s why it’s imperative that you take the time to shop around when it comes time to renew your mortgage.

Ask for Better Rates

Your current lender will make every effort to ensure you don’t check around for lower terms and rates when it comes time to renew your mortgage. Mortgage lenders will send existing clients renewal offers before your mortgage term is up. They’ll offer you a slight discount off their posted rate. To make it easy for you, they even enclose a letter you simply need to sign and send back.

Easy, but costly. Again, renewing your mortgage without shopping around mean you’re paying a higher mortgage rate than you need to. You can try and negotiate a lower rate with your current lender, but chances are good they won’t be able to provide you with a rate a new lender could.

Whether you decide to stay with your current lender or are thinking of switching, don’t accept the first mortgage rate they offer; ask for something better.

To find out what kind of mortgage or financial options are available to you, contact Canadalend.com today or apply online and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience.