Dec 2012 – What’s going on with real estate & mortgages?

We recently attended the CAMMP conference for CDN mortgage professionals and were fortunate to listen to the insights or many high profile economists and industry experts.  The general consensus is not surprising – A) Real estate market is cooling, B) mortgage lending has tightened up substantially, and C) interest rates are not going up any time soon.  It depends on whom you talk with about all the rule adjustments in the mortgage industry, but generally speaking lots of the changes are good. Others lack logic in our humble opinion, but we don’t make the rules. While lending requirements were quite liberal for a couple of years, they’ve been adjusted to curtail rising CND household debt levels. The big criticism, however, is that the timing of the rule changes combined with the natural slowdown in the housing market has amplified the cooling effect.

Prices are trending downwards, but will in no way mimic the housing market in the US. The market is structurally different here and the biggest risk would be a material spike in interest rates, which will not happen.  Rates will remain low for the foreseeable future as the local and global economies sort themselves out. Mortgages have definitely become more difficult and the big risk to consumers is the lack of information and understanding. Some deals that were approved 5 years ago no longer get approved. For that matter, some deals that were approved a month ago, no longer get approved. The changing tides in the industry present challenges for us as industry professionals as well because the there is always a lack of communication regarding the relevant changes. We work diligently to make sure we understand and are on the leading edge of information to ensure that we can best serve our clients. Clients, in turn, need to be careful about who they work with to make sure their advisor is competent.

Call/email us anytime to address any concerns regarding existing mortgages you have or ones you wish to apply for in the future.

Talk soon,
Gord, Steve and Jeff

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