It's a Buyer's Market
What's happening in the #Alberta real estate market? Prices are dropping and inventory is growing. This makes for a buyers market.
Year over year statistics show that prices are sliding down in Edmonton and Calgary due to increased supply. New listings are down over last year but there are still a lot of homes for sale. The sluggish #energy sector is definitely a factor here, as are the new mortgage regulations that went in to place almost a year ago.
Remember back in January how you were hearing "stress test" and "mortgage" all over the news? That's the Bank of Canada qualifying rate being used to qualify your debt to income ratios instead of the contract rate on your mortgage. So for example, as of today, with less than 20% down payment, you can secure a 3.49% 5 year #fixedrate on your mortgage, but you would need to qualify at 5.34%. So the government has built in a cushion in case your income stays the same but rates climb over the 5 year term. It wasn't a bad plan and it has had the desired result....it has caused MANY #firsttimehomebuyers to have to postpone getting into the market. And if first time home buyers aren't buying, then move up buyers aren't buying. The cooling of one sector definitely has a domino effect on the rest.
This is just one piece of the government regulations that are making getting a #mortgage tougher and cooling the market. They've also implemented different qualifying measures for those of us who have Lines of Credit available, whether you have a balance or not; a stress test for those who are buying with MORE than 20% down payment; no mortgage default insurance on Refinances, making this a more expensive option to consolidate #debt than it used to be; not to mention the removal of mortgage default insurance on longer amortizations.
There are so many ins and outs when it comes to getting a mortgage, you aren't alone if you feel overwhelmed. Ask for help. Ask an expert. Make the #rightchoice and use a #broker. Mortgage brokers are LICENSED, we have education in our field. We work for you and if you choose the #rightbroker, they will put your interests ahead of the banks and their own.