2024 Spring Market Expectations

The spring housing market is just around the corner! Whether you’re looking to sell, buy, or want to ensure your mortgage is in order, knowing what to expect can help.

Here is the low down on what we are anticipating for various factors affecting the housing market this season:

• Interest Rates: While the Bank of Canada held the overnight rate steady at 5% for the past five meetings, it is expected that they will make the first interest rate cut in June or July this year, followed by additional reductions in the overnight rate to a more manageable level as the year continues. Experts are predicting that The Bank of Canada rate could drop to 3.75% by the end of 2024.
• Housing Prices: With interest rates expected to start coming down mid-year, that means more affordability and buyers in the market. As a result, it is expected that home prices will increase this year.
• Market Inventory: According to the Canadian Real Estate Association, the number of new properties listed has edged up 1.5% month-over-month in January, with this expected to rise as the interest rates drop.

Looking to buy? For those of you who may be looking to purchase a home this Spring, here are some things that can help you be prepared:

• Get your finances ready by paying off as much of your debt as possible to improve your debt-to-income ratio and ensure you qualify for the best rate possible.
• Obtain a mortgage pre-approval before starting your search. This helps you understand your budget and makes your offer more appealing to sellers.
• Clearly define your priorities and preferences for a home. This will help streamline your search and make decisions more efficiently, especially as the market becomes more competitive.

Looking to sell? If you want to sell your home this Spring, you will want to be ready to take advantage of the market! Some things you can do include:

• The first step is to find a reliable real estate agent who can help you with pricing and listing your home for sale. Not sure who to call? I can provide some references!
• Allow for open houses during evenings and weekends whenever possible to ensure you’re maximizing potential buyer foot traffic.
• I have even more tips on decluttering and getting your home ready to sell below!

Want to renew or refinance? If you’re not looking to sell or buy this Spring, you may still be looking for mortgage advice or assistance with your home and finances. Now is a great time to make sure your mortgage is working for YOU! With so many renewals coming up this year, keep in mind there are several benefits to taking time to review your renewal before you sign:

• Get a Better Rate: With interest rates expected to come down, taking time to reach out to me and shopping the market could help save you money!
• Consolidate Debt: Renewal is a great time to take a look at your existing debt and determine whether or not you want to consolidate it onto your mortgage. In most cases, the interest rate on your mortgage is less than you would be charged with credit card companies or other forms of financing you may have.
• Start on that Reno: Do you have projects around the house you’ve been dying to get started on? Renewal time is a great opportunity for you to look at utilizing some of your home equity to help with home renovations so you can finally have that dream kitchen and updated bathroom, or even utilize it to purchase a vacation property!
• Change Your Mortgage Product: Are you not happy with your existing mortgage product? Perhaps you’re finding that your variable-rate or adjustable-rate mortgages are fluctuating too much and you want to lock in! Alternatively, you may want to switch to a variable as interest rates level out. You can also utilize your renewal time to take advantage of a different payment or amortization schedule to help pay off your mortgage faster!

No matter your plans for this month or the coming season, don’t hesitate to reach out to me for expert mortgage advice!

Small Home Improvements That Make a BIG Impact

Whether you’re looking to sell your home this year, or just want to make some updates, I have put together six small home improvements that can make a BIG impact on your space! From improving saleability to refreshing your home, here are some simple and affordable ideas to help get you started:

• Painting: One of the easiest ways to spruce up your home for a refreshed vibe or sale is to add a new coat of paint! While it is a relatively simple task for a new homeowner to take on, you might be surprised at how many people will pass on a house because they are not a fan of the paint colors or the flooring. A fresh coat of paint - especially more neutral colors such as beige, cream, light grays, and soft blues or greens - can do wonders to make a home feel appealing.
• Light Fixtures: I don’t know about you, but I haven’t taken a good look at my light fixtures in a while. However, potential buyers will! Light fixtures are another low-cost and relatively easy improvement you can make to your home. Upgrading to newer styles and ensuring they are clean, with fresh LED bulbs, will help add an extra sparkle to your home!
• Update Your Hardware: Another overlooked aspect of a home are light switches and door handles. If your home is 20 years old, most likely your white light switch covers are not so “white” and your door handles are a little worn down. These are a cheap and easy replacement that will go a long way to boost your interior!
• Swap Out Your Window Coverings: Just like with a fresh coat of paint or new hardware, swapping out your window coverings is a small change that can make a big impact. Change your stale, white plastic blinds for wooden slats, or update your curtains to something fresh and vibrant!
• Refinish Your Cabinets: The kitchen is known to be a central space in most homes, but did you know roughly 80% of homebuyers feel that it is the most important space to consider when deciding on a new home? While a full kitchen renovation may be out of the question and all-new kitchen cabinets can cost thousands, there is a third option. Refinishing or repainting your cabinets is a great alternative for breathing new life into your kitchen!
• Curb Appeal: They say don’t judge a book by its cover but, when it comes to selling your home, first impressions matter. This is where curb appeal comes in! If a potential buyer pulls up to see overgrown weeds, clogged gutters, or cracked concrete, they are already going to have a negative impression of the home and it will be harder to impress them once they are inside. Attending to landscaping and any outside maintenance needs will go a long way in making your home more appealing. A pressure wash and a new coat of exterior paint can also do wonders to give your home a facelift!

By putting the effort into completing a few small changes around your home, you can reap big rewards when it comes time to sell - and increase your comfort in the interim!

If you are in the market to move this Spring, contact us now to start the process to prepare to shop for your new home!

Fraud Awareness Month

Did you know March is Fraud Awareness Month? Protecting yourself and your mortgage from fraud is crucial to safeguard your financial well-being. Understanding some of the more common mortgage fraud scams and how to protect yourself can make all the difference!

The most common type of mortgage fraud involves a criminal obtaining a property, and then increasing its value through a series of sales and resales involving the fraudster and someone working in cooperation with them. A mortgage is then secured for the property based on the inflated price.

Below are some red flags to be aware of as potential lead-ins to fraud:

• If someone offers you money to use your name and credit information to obtain a mortgage

• If you are encouraged to include false information on a mortgage application

• If you are asked to leave signature lines or other important areas of your mortgage application blank

• If the seller or investment advisor discourages you from seeing or inspecting the property you will be purchasing

• If the seller or developer rebates money on closing, and you don’t disclose this to your lending institution

Another fraud scheme to be aware of is title fraud. Title fraud is essentially a form of identity theft and is typically discovered when your mortgage mysteriously goes into default and the lender begins foreclosure proceedings.

With title fraud, an individual using false identification to pose as you will register forged documents transferring your property to his/her name. From there, they register a forged discharge of your existing mortgage and get a new mortgage against your property. Then the fraudster makes off with the new home loan money without making mortgage payments. The bank thinks you are the one defaulting – and your economic downfall begins.

But don’t panic! There are lots of ways you can protect yourself from title fraud:

• Always view the property you are purchasing in person

• Check listings in the community where the property is located – compare features, size, and location to establish if the asking price seems reasonable

• Make sure your representative is a licensed real estate agent

• Beware of realtors or mortgage professionals with a financial interest in the transaction

• Ask for a copy of the land title or go to a registry office and request a historical title search

• In the offer to purchase, include the option to have the property appraised by a designated or accredited appraiser

• Insist on a home inspection to guard against buying a home that has been cosmetically renovated or formerly used as a grow house or meth lab

• Ask to see receipts for recent renovations

• When you make a deposit, ensure your money is protected by being held “in trust”

• Consider the purchase of title insurance. While title can be purchased after taking possession or years later, the best time to purchase a title insurance policy is NOW before an issue like fraud is discovered.

Remember, being proactive and vigilant is key to protecting yourself and your mortgage from fraud. If you suspect fraudulent activity, act promptly to mitigate potential damage and report it to the appropriate authorities.

Tips to Improve Your Credit Score

One of the important factors in home ownership is understanding things like your credit score. Some people don’t pay much attention to this metric until they begin the mortgage discussion! However, you will find that your credit score is one of the most important factors when it comes to qualifying for a mortgage at the best rate – and with the most purchasing power.

Credit scores range from 300 to 900, the higher your credit score the better. Ideally, you should be aiming for a credit score of 680 for at least one borrower (or guarantor), especially if you are putting under 20% down. If you can make a larger down payment of 20% or more, then a score of 680 is not required.

This score is based on spending habits and behaviors including:

• Previous payment history and track record of paying your credit accounts on time are the number one thing that your credit score considers.

• Your current level of debt and whether you’re maxed or not is the second most important factor.

• How long you have had your credit in good standing is the third most important factor.

• Attaining new credits is the fourth factor and can be a red flag if you’re opening several credit cards, accounts, or loans in a short period.

• Your credit mix is the final aspect of your credit score to determine whether you have a healthy mix of credit cards, loans, lines of credit, etc.

If you want to improve your credit score, you can! It is a gradual process, but it is well worth it. Here are some tips to help you get started!

• Pay Your Bills: This seems pretty straightforward, but it is not that simple. You not only have to pay the bills, but you have to do so in full AND on time whenever possible.  Paying bills on time is one of the key behaviors lenders and creditors look for when deciding to grant you a loan or mortgage. If you are unable to afford the full amount, a good tip is to at least pay the minimum required as shown on your monthly statement to prevent any flags on your account.

• Pay Your Debts: Whether you have credit card debt, a car loan, a line of credit, or a mortgage, the goal should be to pay your debt off as quickly as possible. To make the most impact, start by paying the lowest debt items first and then work towards the larger amounts. By removing the low-debt items, you also remove the interest payments on those loans which frees up money that can be put towards paying off larger items.

• Stay Within Your Limit: This is key when it comes to managing debt and maintaining a good credit score. Using all or most of your available credit is not advised. Your goal should be to use 70% or less of your available credit. For instance, if you have a limit of $1000 on your credit card, you should never go over $700. NOTE: If you find you need more credit, it is better to increase the limit versus utilizing more than 70% of what is available each month.

• Credit and Loan Application Management: Reduce the number of credit card or loan applications you submit. When you submit too many credit card applications, your credit score will go down, and multiple applications in a short period can do more damage. You’re best to apply for one or two cards and wait to see if you are accepted before attempting further applications.

If you have questions about your credit score, don’t hesitate to reach out to me today! Whether you want to check your score or find out how you can improve it, my door is always open.

Amortization Options

Your mortgage amortization period is the number of years it will take you to pay off your mortgage. Depending on your choice of amortization period, it will affect how quickly you become mortgage-free as well as how much interest you pay over the lifetime of your mortgage (longer lifetime equals more interest, whereas a shorter lifetime equals less interest but also bigger payments).

Amortization Benchmarks

Let’s start by looking at the mortgage industry benchmark amortization period. This is typically a 25-year period and is the standard that is used by the majority of lenders when it comes to discussing mortgage products. It is also typically the basis for standard mortgage calculators.

While this is the standard, it is not the only option when it comes to your mortgage amortization. Mortgage amortizations can be as short as 5 years and as long as 50-years(interest-only)!

Benefits of a Shorter Amortization

Opting for a shorter amortization period will result in paying less interest overall during the life of your mortgage. Choosing this amortization schedule means you will also become mortgage-free faster and have access to your home equity sooner! However, if you choose to pay off your mortgage over a shorter time frame, you will have higher payments per month. If your income is irregular, you are at the maximum end of your monthly budget or this is your first home, you may not benefit from a shorter amortization and having more cash flow tied up in your monthly mortgage payments.

Benefits of a Longer Amortization

When it comes to choosing a longer amortization period, there are still advantages. The first is that you have smaller monthly mortgage payments, which can make home ownership less daunting for first-time buyers as well as free up additional monthly cash flow for other bills or endeavors. A longer amortization also has its advantages when it comes to buying a home as choosing a longer amortization period can often get you into your dream home sooner, due to utilizing standard mortgage payments versus accelerated. In some cases, with your payments happening over a larger period, you may also qualify for a slightly higher value mortgage than a shorter amortization depending on your situation.

Let’s Chat!

I am happy to help with the decision for the amortization that best suits your unique requirements and ensures you have adequate cash flow. However, it is important to mention that you are not stuck with the amortization schedule you choose at the time you get your mortgage. You can shorten or lengthen your amortization, as well as consider making extra payments on your mortgage (if you set up pre-payment options), at a later date.

Ideally, you are re-evaluating your mortgage at renewal time (every 3, 5, or 10 years depending on your mortgage product). During renewal is a great time to review your amortization and payment schedules or make changes if they are no longer working for you.

If you have any questions or are looking to get started on purchasing a home, don’t hesitate to reach out to me today!

Making Your Home Workspace More Productive

Fall in love with your home and your workspace again with these tips to help you make your home office space more productive!

• Establish Boundaries: A key component of being more productive at home is to establish proper boundaries between work and personal life. While not all of us at home have space for a dedicated home office, it helps to create a dedicated area in your house such as your kitchen table. In addition to having a dedicated physical space to create boundaries, establishing when it is time to focus on work versus switching off for the day is key. Establishing norms such as time and location can make a big difference in ensuring productivity, but ensure you have discussed with your manager and/or team about when communication is expected.
• Create a Routine: This is especially important for individuals who are used to an office setting and whose mornings would consist of showering, breakfast, and commuting. When the commute is off the table, it is just as important to maintain a good morning routine - even if you have the option of more flexible hours. Determine what works best for you to keep you focused and engaged and maintain that routine throughout the week.
• Declutter: When working at home, you no longer have to account for just your immediate space but the general environment as well. It can be distracting to try and work at the kitchen table when your sink is a mess or the carpet needs vacuuming. Be sure to keep your house as decluttered and tidy as possible to prevent mid-day distractions and to clear your mind to better focus on work-related tasks.
• Take Breaks: When working in an office, you’ll often be reminded to take your lunch break when the rest of your colleagues are headed out for theirs. At home, it can be a little more difficult to maintain your lunch hour - or take breaks at all! And when we do, often these breaks are little more than scrolling through social media. While taking breaks is vital, a productive break is even more so. Consider reading relevant articles to give you some inspiration, making a home-cooked meal or even taking a walk around your block for a more restful break.
• Upgrade Your Equipment: Whether you’re currently working in an old wooden kitchen chair or lack proper wrist support, a big step towards being more productive at home is upgrading your equipment. If you’re going to be sitting all day, investing in a comfortable, supportive desk chair that won’t leave you feeling achy will make a huge difference! Also, make sure you have enough desk space to be able to work comfortably and include ergonomic support where applicable for an even more comfortable (and productive!) work-at-home experience.

Estate Planning: Are You Covered?

“New Year, new you” may be a cliché but it is for a reason! The New Year always has us thinking about where we are now, and where we want to end up. When it comes to your personal goals, a review of your finances and estate should be at the top of your list. Proper estate planning can ensure that you have a stress-free year knowing you are covered!

Is your will up-to-date?

The purpose of a will is to outline your assets and determine how they will be distributed, as well as who will be in charge of managing affairs. Some key components to include in this document are:

• An up-to-date list of your significant assets; note the location if outside your province or Canada.
• Who will inherit your assets? And which?
• Outline where you want assets to pass outside your estate to avoid probate fees (e.g., an insurance policy, an RRSP). Do this via beneficiary designation.
• If they are minors, do you have a trust or other provisions in place?
• Is the list of beneficiaries in your will up to date? Have there been recent births, deaths, or marriages in your family?
• Have you included alternates in case your named beneficiaries predecease you?
• Do you want to give to charities or other organizations?
• If you have children, have you indicated a guardian and spoken to them?
• Did you include an alternate in case the guardian you chose is unable to commit?
• Have you reviewed your choice of guardian as your child grows older?
• Your executor will carry out your wishes after you die. You can name one executor or two or more co-executors. Be sure to name one or more alternates as well.

Have you assigned a power of attorney?

Another important (and often overlooked!) aspect of estate planning involves naming a power of attorney. This individual is someone you trust to make decisions for you should you become unable to do so due to injury or illness, whether temporary or otherwise. Power of attorney documents are created for you by a wills and estates lawyer (or notary in Quebec) as part of your estate plan.

Do you have mortgage protection insurance?

Through Manulife Mortgage Protection Plan (MPP), you have the opportunity to add a portable insurance policy to your mortgage that helps protect your loved ones and your home should something unexpected happen to you. Unlike bank insurance, MPP is a portable life and disability product that you can take with you, from lender to lender and property to property. This gives you the utmost future flexibility and is unlike bank insurance products which tie you down exclusively to them. To ensure you get the best rate at renewal, you must have invested in an insurance product like MPP that will give you the freedom to move!

Mortgage life insurance will protect your family's future by paying out your mortgage should the mortgage holder pass away. Manulife will also make your mortgage payments while your claim is being adjudicated, so there is no added stress for a loved one at an already difficult time. Mortgage disability insurance will take care of your mortgage payments plus property taxes if you become disabled. Disabilities from sickness and accidents are relatively common and will affect 1 in 3 borrowers throughout their mortgage amortization. Manulife provides budget-friendly payment options, the ability to top-up your coverage and so much more.

These are all important aspects to consider to ensure your estate and family will be provided for should something happen. While never a fun topic, it is an important one and the better prepared you are, the better off your loved ones will be.

I would be happy to discuss coverage with you to ensure peace of mind for your family and their future.

Pantone of the Year

As we enter the New Year, it’s always fun to reflect on the previous twelve months and take a look at what is trending as we move forward.

If you’re unfamiliar with the Pantone of the Year, it is more than just a colour to paint your walls. Since 2000, the Pantone Colour Institute has been indicating a colour of the year and, for many, this is seen as a representation of the current moment in time helping us to reflect on the culture and state of the world. Think of it like a snapshot in time!

For 2024, the Pantone color of the year is “Peach Fuzz”; which is notably a warm and cozy hue to feed and nourish the soul.

During this post-pandemic period of turmoil around the economy, mortgage industry, and housing market, many of us are currently in need of more nurturing and comfort. This colour signifies the importance of caring and community even more as we enter 2024.

As the calendar turns over, take inspiration from Pantone to make the New Year one of comfort, healing, and peace for yourself and those around you. With interest rates forecasted to drop towards the latter half of 2024, housing and job markets set to stabilize and inflation slowly reducing to normal, we have some stability to look forward to.

To ensure you can make 2024 as comfortable as possible, don’t hesitate to reach out to me for mortgage advice. Managing your finances can be a great way to reduce stress and leave time for more important things! Renewals are on the rise, and this can be a great opportunity for you to rebalance your mortgage contract, review your interest rate and terms, and update your payment schedule to make the most of your monthly cash flow.

Can Mortgage Renewals Affect the Housing Market? 

2024-2025 will see about 2.2 million mortgage borrowers renewing, representing 45 percent of outstanding Canadian mortgages.

The effects are not just about higher monthly payments, this will likely produce a ripple effect through the entire housing market. 

CMHC estimates that average monthly payments could increase 30-40 percent as mortgages come up for renewal over the next few years.

In September 2021, five-year mortgages fell to a historical low of 1.44% leading to lower monthly payments for many homeowners. Fast forward to this year, however, the average five-year fixed mortgage sits in the mid-6 percent range (lower for homes with equity).  

Homeowners who benefited from low mortgage rates during the pandemic may be in for a major shock as their agreements come up for renewal. Depending on the renewal timing, some homeowners may decide to sell rather than renew. This rapid inventory increase could cause more pricing decreases as demand, depending on geography, will have a buyers' market and lead to lower sale prices. 

Don't get your hopes up without doing your due diligence, though. Just because the tables are turning in one region, this doesn’t mean the rest of the country will follow suit. 

To really understand if Canada is shifting towards a buyer’s market, prospective homebuyers and those expecting to renew their existing mortgages need to watch for telltale signs, such as: 

•  Higher inventory levels 
•  A drop in median sale prices 
•  An increase in the average number of days homes spend on the market 

Are we heading to a Buyers' Market again? 

Mortgage renewals can have an impact on the housing market, although the extent of that impact depends on various factors. Here are some ways in which mortgage renewals can affect the housing market: 

1. Interest Rates: 

• When homeowners renew their mortgages, the interest rate they secure can influence their monthly payments. Higher interest rates may result in increased mortgage payments, potentially affecting housing affordability. 
• Higher interest rates could also slow down demand for new mortgages, as borrowers may be more cautious in a higher-rate environment. 

2. Affordability: 

• Changes in interest rates during mortgage renewals can impact the affordability of housing for existing homeowners. If rates increase significantly, some homeowners may find it more challenging to meet their mortgage obligations. 

3. Housing Demand: 

• Mortgage renewals can influence the overall demand for housing. If interest rates are low during renewal periods, homeowners may be more likely to continue homeownership or even consider upgrading to a more expensive property. 
• Conversely, higher interest rates could lead to reduced demand, as potential buyers may be deterred by increased borrowing costs. 

4. Refinancing Activity: 

• During mortgage renewals, homeowners may also have the option to refinance their mortgages. This can impact the housing market as well, especially if homeowners choose to tap into their home equity for renovations or other investments. 

5. Market Stability: 

• Stability in mortgage renewal rates can contribute to overall market stability. Predictable and reasonable renewal rates are generally positive for homeowners and the housing market as a whole. 

6. Regional Variances: 

• The impact of mortgage renewals on the housing market can vary by region. Different areas may have unique economic conditions, and local housing markets may respond differently to changes in interest rates. 

It's important to note that the relationship between mortgage renewals and the housing market is complex, and various factors, including economic conditions, employment rates, and government policies, also play a significant role. Monitoring economic indicators and staying informed about market trends is crucial for understanding how mortgage renewals may impact the housing market in each period. 

We are hoping that the next move is going to be a cut to Bank of Canada lending rates by the government in mid-2024. The government is balancing its fight against inflation with the worries about Canadians impacted by renewals.  

For a quote to estimate your options at renewal, do not sign the renewal notice without checking your options. We regularly see people saving 30-50bps on renewal offers, depending on the loan to value of your mortgage at renewal.

Call us for a free quote or email [email protected]!