For those new to myself and us at HuronMortgages.ca, every third Sunday or so I publish a real estate and financing industry blog (Sunday Dock Read). It touches on current events, helpful tips and of course the state of the industry. The material below is taken in part from one of my most recent blogs so if you enjoy it, please stop by www.huronmortgages.ca/blog for more contact; we’d love to see you!
It’s been some time since I last put together a Sunday Dock Read, and there’s a good reason for that. We’ve been caught up in a whirlwind: preparing the cottage for winter, navigating through a bustling holiday season, and braving flu season. Somehow, we’ve managed to reach the midpoint of February already. But amidst all this, we’ve accomplished a significant milestone—our new website, www.huronmortgages.ca, is finally live! Over time, it will serve as the central hub for all things related to financing, real estate, and updates from yours truly!
2024 Real Estate Hot Topics
Why use us: HuronMortgages.ca as your Mortgage Agent is better than using your bank that gives you a debit card.
Bank mortgages and mortgage agents both play crucial roles in facilitating the process of obtaining a mortgage, but there are significant differences between the two:
- Lender: When you get a mortgage directly from a bank, you're borrowing money from that specific bank. In contrast, mortgage agents act as intermediaries between borrowers and multiple lenders, including banks, credit unions, and other financial institutions.
- Options: Banks typically offer a limited range of mortgage products available from their institution, whereas mortgages have access to a broader array of mortgage products from various lenders. This means agents can often offer more options tailored to borrowers' specific needs and financial situations.
- Interest rates and fees: Banks set their interest rates and fees for their mortgage products. Mortgage agents can help you compare rates and fees across multiple lenders to find the most competitive options.
- Expertise and guidance: Mortgage agents specialize in mortgage lending and can offer expert advice and guidance throughout the mortgage application process. They can help borrowers understand their options, navigate the complexities of the mortgage market, and find the best mortgage solution for their needs.
- Negotiation: Mortgage agents may have more room for negotiation with lenders due to their relationships and volume of business, potentially resulting in better terms for borrowers.
In summary, while both bank mortgages and mortgage agents serve the purpose of providing financing for home purchases, mortgage agents are superior in that they differ in terms of the range of options available, accessibility, expertise, and the nature of the relationship between the borrower and the lender.
Mortgage rates will fall in 2024
In late 2023, there was a glimmer of hope as the Bank of Canada Governor hinted at potential interest rate drops for the upcoming year. However, despite this optimistic outlook, industry experts caution that even with a decrease in rates, achieving affordable housing may remain challenging for many individuals.
The next Bank of Canada rate announcement is scheduled for April 10th, and I’ve maintained a positive outlook, anticipating a 0.25% rate drop. However, it’s disheartening to realize that without a significant reduction in the Consumer Price Index (CPI), the Bank may opt to keep the key rate unchanged to avoid disrupting the progress made in curbing inflation. Nevertheless, there remains a slight possibility that we may witness the first 0.25% rate cut during this announcement.
Additionally, the BOC must exercise caution to avoid significantly tilting the balance and triggering a prolonged downturn in the housing market, which could lead to a contraction in employment.
Are variable rates the answer for your mortgage?
Here’s how we collaborate to make the right choice:
- Exploring the potential advantages and drawbacks of variable and fixed mortgage rates.
- Understanding the factors contributing to the recent increase in variable rates following the 2024 rate pause.
- Evaluating why a variable rate could lead to long-term savings.
- Discuss the rationale behind lower penalties associated with variable rates compared to fixed rates.
- Reviewing the success of fixed rate products over the past 24 months.
- Explaining the significance of amortization and term and how borrowers can leverage them to their advantage.
Call or email me and I will help walk you through a brief 5-minute application. Thereafter we’ll schedule a time for our discussion; our primary goal is to tailor the most suitable product for your family’s needs and suitability.
Suitability sets agents apart from banks, as banks are limited to offering their in-house mortgage products, while agents can access a wide range of lending options to ensure borrowers achieve the best financial outcome possible.
Canadian housing hints at signs of recovery
In 2024, Canada’s housing market will be heavily influenced by interest rates. At the start of the year, things might be slow, and prices might be lower because the Bank of Canada keeps interest rates high, making it hard for many people to buy homes.
But, around the middle of Q2, we will see interest rates go down, which will make things pick up speed in the housing market, especially when people feel more confident about buying.
However, even with lower interest rates, it might still be tough for some people to afford homes. It might take until later in 2024 or even into 2025 for there to be better opportunities for buyers, especially for those buying a home for the first time and who might not have as much money to spend.
As sales look up, more people might decide to sell their homes. Also, if homeowners are surprised by high mortgage renewal payments, they might decide to sell. If lots of people start selling, it will balance out the number of homes available to buy and the number of people looking to buy them. This could help prevent prices from going too high. Over the past few years, there have been more homes available to buy after hitting very low levels during the pandemic.
Real Estate 101 – Exploring the 4 stages of the yearly cycle
The real estate market operates in a cycle comprising 4 stages, each lasting 3 months. Understanding these stages can aid buyers and sellers in making informed decisions. Below are the stages and recommended actions for each:
- Stage 1 – January to March: Heightened interest in home buying, but lower inventory. Buyers should expect rising prices and act quickly. Sellers can list their properties but should avoid extensive renovations.
- Stage 2 – April to June: Spring sees a surge in home sales. Buyers may find more options but face increased competition. Sellers have a prime selling opportunity.
- Stage 3 – July to September: Summer brings a slowdown in sales with stabilized prices. Buyers have more negotiating power, but sellers are eager to close deals.
- Stage 4 – October to December: Winter months witness a decline in price growth and seller confidence. Buyers may find lower-priced listings but face reduced seller activity. Sellers willing to negotiate may attract committed buyers.
Whether you need guidance on real estate and financing or any other topic, Huron Mortgages is here to help in any way. Contact me at 519-497-3667 or by email at [email protected].
Mathew Monks | Mortgage Agent Level 2
FRSA Licence M18002043
P: 519-497-3667
E: [email protected]
W: huronmortgages.ca
HuronMortgages.ca operates as an independent marketing endeavour by Mathew Monks of Mortgage Intelligence Brokerage #10428.