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Robert and Sally purchased a home 25 years ago, have since paid off their mortgage, and benefited from the appreciation on the property.

Today, the house is valued at $1,200,000, so they contacted their mortgage broker and set up a tax-free Reverse Mortgage. The Reverse Mortgage allowed them to gift 200K to their son Daniel without them having to make any monthly mortgage payments. Daniel was able to use that 200K to put a downpayment on a new home and qualify for his own conventional mortgage.

Robert and Sally essentially provided an early inheritance without affecting their own finances in any way.

Contact us anytime for more information.

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Updated: Apr 9, 2023

We completely understand the desire to wait until you feel your financial situation is as strong as possible before moving forward in the application process. As long as you are in the ballpark, though, with being able to qualify for the financing you expect to need; and knowing that you should be there shortly, moving forward today is the way to go.

It's helpful to remember, though, that there is a severe shortage of housing inventory in Canada, which is likely to stay the same for a while. This means a person selling their property will likely have several interested buyers already pre-approved and ready to move forward. If you decide only to start the pre-approval process once you find a property you want, you are likely to miss out.

Yes, interest rates are currently higher than we have been used to, seeing no question, but prices are much lower. A good strategy for many at the moment is to purchase a property while prices are low and take a short-term mortgage of 1 to 3 years. When the rates come down, we can then look at refinancing the mortgage so that you can take advantage of the lower rates. While Real estate prices may drop a bit further if you wait, most people believe that we are almost at rock bottom now, and prices are unlikely to fall much more.

Given how the mortgage and real estate industry works, you never want to have to arrange a mortgage when you're under the pressure of a deadline.

  • If interest rates continue to increase, and you decide to start the pre-approval process at a later date, you can easily be stuck paying the higher rates, whereas, with pre-approval, your interest rate is secured. If you are pre-approved and the rates come down, you can get a lower rate.

  • If you are "Pre-Approved" and don't actually end up doing a transaction, that is perfectly fine. Being Pre-approved never means that you need to complete a transaction.

  • Many experts expect to see real estate prices increasing soon as they are tied to interest rates which are expected to come back down at some point this year. If you wait until rates come down to move forward with the process, the market could abruptly return to a seller's market, which means that you may be dealing with higher prices, bidding wars on properties, and vendors unwilling to allow you to have the protection of a financing condition and home inspection in your offer to purchase. This is what the market looked like between 2020 and 2022, and it was very difficult and frustrating for buyers.

Lastly, the government just announced this month (Jan 2023) that they are looking at weighs to once again tighten up on mortgage lending guidelines making it more difficult for lenders and borrowers. For people that are "just" able to qualify today but that could be left out in the cold tomorrow, it's one more reason not to delay. We will provide more information on this as soon as it becomes available.

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