You are here because you are wondering if right now, this specific time is the best time for you to buy.
You may also be considering selling, and wondering the same thing, is now the best time for me to sell?
Don’t worry, I understand.
You are not alone, and I get asked these questions on a regular basis.
Typically, when rates are high, we see real estate prices come down, or at the very least slow down and stabilize some. When rates are low, home prices seem to increase and people seem to also find themselves competing with many others for the same property.
It’s human nature to want to be able to time the market. You want to be able to sell your house for the maximum price, but when you are buying, you want to be able to get it for the cheapest price.
Narratives can be a very powerful thing. When prices are rising, hysteria kicks in and people think that they will never come down. And when they do start to come down, or plateau a little bit, the fear and pessimism kicks in leaving people to wonder if they really should be buying right now, or if they should be waiting.
The thing that is often overlooked, is people buy and sell for more than just financial reasons. Especially in our market, we have enjoyed some phenomenal gains, but at the end of the day, your home’s primary purpose is shelter for you and your family.
There are still some people who want or need to buy a property now. People who are in situations like the following:
- couples separating
- people downsizing,
- people needing more room and looking to upsize
- people who see an opportunity,
- people who are renting and their lease is expiring and their landlord is asking them to leave
- people who bought pre-sales that are now coming up for completion.
There are also people who may need some money to pay off some higher interest debts, or people that need extra space but are not able to sell. In both of these cases, a refinance might be the best option.
There are a lot of different reasons someone may need help right now.
I think that regardless of the market conditions, it is important for you to be prepared. Being prepared is great, I am a huge advocate of that.
Knowing where you stand, with your numbers is something that we helped dozens of people out with every single week.
Here is how things are shaping up with the lenders right now and things for you to keep in mind about he financing process:
First – all financing requires some level of income. Even “net worth” programs require some form of income confirmation. You have to make payments, and they need to make sure that you have a way to make them. And especially today – we need to not just show SOME level of income, we need to show a sustained and continuous level of income in order to qualify for a mortgage.
The most important question right now is: Are you facing a layoff? Is your company seeing a decrease in revenue? Is your employment guaranteed? Is it secured? What’s the worst-case scenario you can think of and how likely is it?
If you are laid off, and even if you have EI coming in, this is a HARD STOP with all of the lenders.
Once we have established that you are not facing any lay offs, and your job is going to continue, the next step: Okay, give me ALL of your income documents UP-FRONT. More than EVER, we need to have EVERYTHING up front.
As an example, yesterday, I had a couple, both on Salary, Essential Service Jobs, send me their T4, paystub, job letter and 3- months of payroll history. This is exactly how we can help you, by you helping us. That is exactly the kind of stuff we need to see in order to make 100% sure that not only will you be approved but you’re also going to close. At the end of the day, an approval means nothing to you without the keys to your new place, right?
- employment letter
- paystub – within the last 2 payrolls
- 2 most recent T4 if I need an average
- 2 Most Recent NOA
- 3 months payroll deposits
- And T1 General tax returns to see if we’re using any other income sources
What if you’re self-employed? THIS is a big one. If you’re a business-for-self employee, the lenders will ABSOLUTELY look at your current type of work. Are you able to work remotely? Are you part of the essential services list? Are you a face-to-face contractor or employee? How likely is it that your line of work will be faced with a reduction in revenue and/or opportunities? So many questions.
- 3 year tax returns
- copy of business license or notice of articles
- last six months business bank account statements
- last six months’ worth of invoices
- website, or, source of business
- a detailed description of how you work, what you do, where you work etc.
The next thing is if you own investment property and are buying another one OR a property for you to move into. Here we go again with the questions! Did tenants pay? Will they keep paying? How leveraged are you? Do you have any HELOC (Home Equity Line) room on your other property(s)?
And finally your down payment. Hey! Guess what! You may or may not have noticed that the stock market is moving up and down lately. It’s more like 1 step forward, 3 steps back. Although the lenders are not concerned with how well your stocks are doing – perhaps it’s time to do a check-up and see for yourself? Don’t be caught holding a bag of stocks that are 2/3rds the value they were when you were planning on buying. (And besides, really? You’re holding your down payment in stocks? GICs or CASH is the ONLY place you should be putting down payment money WELL in advance). Also, don’t be surprised if suddenly your options for down payment go up, too. “65 is the new 80” is said in the alternative and private space. What do I mean? Well, if you need a second mortgage to help you fund your down payment, guess what? The “loan to values” or the amount they will lend vs the value of the property is shrinking. Capital is drying up. This is not good for you if you need that help, so, be careful!
- 120 days of your bank history for savings
- your investment accounts
- your RRSP accounts
- Gift letters signed and filled out by Giftor
- (sometimes) a giftor account bank statement
Of course CREDIT still reigns supreme. And more today than ever. I’m seeing lenders have much better rates for applicants with 800+ beacon scores than 680. And for 680 than 600. etc. Finally we are seeing a rational pricing market!
I know things are incredibly in flux right now and maybe the last thing on your mind is your mortgage. I get that. I don’t want to be insensitive to this. However you might make a mistake if you don’t plan this well. This could be for your purchase, or your renewal, or your refinance. So – with the above steps AND a phone call (778-233-2377), we should map this out and see how things are going to end up for you.
Hope this helps!
Thanks for reading
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If you would like more information or a free consultation contact Aleem below, and as a Certified Mortgage Specialist let me help you get the home of your dreams. Great Mortgages, Made Simple.