Recently, the CEO of the Canadian Mortgage and Housing Corporation stated they would issue a “red level” warning for the Canadian housing market.
In case you’re wondering, a “red level” warning indicates evidence of problematic conditions in the housing market and is primarily based on 4 factors:
- Overheated demand, which is marked by the number of houses for sale being greater than number of new listings
- Accelerating rise in house prices
- The overvaluation of homes as reflected in prices that are not justified by income, mortgage rates and population
- Overbuilding of new homes
What does it mean for you as you prepare to get a mortgage? Well, like most things, there is more than one theory about the warning, who it might effect and how.
Some economists, knowing the economy is moving forward and a housing slowdown is already in the works, feel that this warning may really be about slowing down Vancouver’s out-of-control property run and influencing federal policy around housing.
In our opinion, the warning won’t have much impact on buyers, but once again, the new mortgage rules (and coming rule changes) will definitely impact buyers in regards to the new “repayment stress tests” that borrowers will be facing for new mortgages. This could significantly impact first time buyers in the market.
In simple terms, if you are a new buyer with less than 20% down payment, you’ll most likely be approved for less home ownership.
Of course, there are still many excellent options out there, as long as you know how to access them - even for first time buyers.
If you’re trying to get yourself approved for a new mortgage under the new rules, there may never be a more profitable or more valuable time to put a great mortgage broker to work on finding you the best solution out there.
Think about it: Ottawa Carleton Mortgages currently works directly with more than 20 quality lenders, including banks as well as some of the leading “non-big-bank” mortgage lenders in Canada. Nothing works better for you than having lenders compete for your business. Add in the unimpeachable guidance of a 30+ year proven track record and there is simply no way you can get yourself the same options and advantages on your own.
The government and the big banks are not motivated to help you succeed in your mortgage quest, but we are, and I guarantee it. Put us to the test today and see just how much mortgage you can actually get for yourself.
It’s your money, so make them work for it. We’ll help you do that.
Looking for a mortgage? Wondering if you qualify? Interested in refinancing? Our secure and completely confidential “no obligation” quick-form can give you answers, fast. Find it here.