What to Expect From your First Canada Mortgage?
Explore and Understand How the Property Market has Changed over the Years
For better or for worse, it is true that over the years, the Canadian housing markets has definitely changed. Mortgage rates have seen rapid fluctuations, from whooping highs to record lows.
Also, the variety of mortgage products and types has also given potential buyers a chance to explore multiple options before locking into a particular mortgage rate.
And who can forget the situation of the economy? The overall employment rate also plays a major role in deciding the affordability factor of a mortgage and decides which sector of the real estate market is open for you.
Therefore, as a young buyer, when experts tell you that this isn’t the market where your parents bought their first house in, you should believe them. Keep reading to find out how the Canadian mortgage market has changed in recent times and what trends should you expect from it in the present and in the future. Take a look:
It’s Hard to Save!
Even if you cut down impulse shopping and building credit card loans, the current situation of the economy has made it a tedious task to save and secure your future.
Student debt also plays a major role in this regard – paying off your student loan along with your mortgage may turn out to be extremely challenging and frustrating for a young graduate, and therefore, a large number of young people shy away from their very first Canada mortgage.
Down payment Woes
Though down payment can be avoided to a large extent though a CMHC mortgage, it is still an important factor of a Canada mortgage that cannot be overlooked. Putting down a decent down payment can ease your mortgage problems to a large extent, making payments more affordable and cutting down on the hefty interest.
However, even if you do not have sufficient funds in store for a down payment, alternate options such as cash back mortgages can help you a great deal. Exploring different mortgage options such as different terms and different types (fixed or adjustable) can also bring down your monthly payments down to a more affordable figure.
Affordability is getting out of Reach
Although the current situation of economy is still a lot better than how it was a few years ago, there is still a large portion of the population who is not earning enough to afford their monthly payments of mortgage.
The figures currently show that around 80% of new potential homebuyers find it difficult to afford their first Canada mortgage, compared to a stark 13% thirty years ago.
Financial planning and budgeting are critical factors in this regard. As the monthly expenses continue to rise with limited income on the cards, new homebuyers find it difficult to squeeze in a mortgage in their monthly budget as well.
However, the good news here is that proper planning and researching for the best mortgage rates through a reliable broker can definitely do the trick for young homebuyers. Till then, start saving and planning for your first Canada mortgage and you are bound to get a positive result soon!