What to Know About the
With recent Bank of Canada interest rate hikes, and more on the way, here is what you need to know about how these fiscal policy changes affect your mortgage.
First and foremost, the interest rate hikes directly affect individuals that currently have an adjustable-rate mortgage. Depending on your mortgage amount, you're looking at a potential mortgage payment increase of $40 per month for every $100,000 of balance owing. For example, if your mortgage balance is $400,000 then your monthly payment will increase approximately $160 per month.
As Canada’s lending prime has increased, variable rates increase as these rates are tied to prime. Payments need to increase respectively to ensure the scheduled amortization remains the same. Hence you will still pay off your mortgage as the original amortization shows. For those individuals on a fixed-mortgage, you will not be affected by these interim changes outside of renewing your mortgage. If you’re mortgage is up for renewal, you will likely be renewing at a higher rate depending on your lender. If you’re still six months away from renewing, it may be a good idea to look into the options for early renewal to avoid getting caught up in another interest rate hike later this year.
All rates, fixed or variable are expected to rise more over the summer months. Please reach out to me today to discuss obtaining a rate hold. I can lock-in an interest rate for 90-120 days while you plan your next step whether it is renewing, purchasing or planning for changes.
If you're not currently a homeowner, but were looking at getting into the marketplace, it is a good idea to revaluate your budget and potential calculations for homeownership to ensure that your estimates are in line with the new interest rates. Download my mobile app My Mortgage Planner to play around with calculators and review your budget.
While interest rate hikes affect everyone, understanding the dollar value change for your situation and adjusting your budget accordingly, can help ease the pressure from increased mortgage costs. If you have any questions or are not sure what your next move should be, don’t hesitate to reach out to me today! I’d be happy to help review your situation and walk you through your options.
Please browse all pages on our website AnnaSmithRealty and call or e-mail any questions about real estate.
Anna Smith firstname.lastname@example.org 604-505-1647
RE/MAX Crest Realty, 1428 W 7th Avenue Vancouver, BC V6H 1C1
New Westminster Morning
According to social media, the entire world is collapsing.
Let us break it down. *I am not an economist.
Where is our inflation coming from?
At any given moment in time, we have a fixed amount of goods and services versus a fixed amount of currency.
If we increase the amount of currency available and the number of goods and services remains the same, the price of goods will inflate.
If we decrease the production of goods and services versus a fixed amount of currency, the price of goods and services will inflate.
If there is pent-up demand (increase) for goods and services versus a fixed amount of currency, the price of goods and services will inflate.
The above three have all happened in the last 2 years due to covid and we are now seeing the result of these events.
How will inflation stop or slow down?
Decrease the demand for goods and services.
Increase the supply of goods and services.
Increase the demand for currency.
Decrease the supply of currency.
What can the Bank of Canada do?
The only thing they can do is increase the rate. When they increase the rate, the demand for currency will decrease. Less currency is available, in turn decreasing the price of goods and services and slowing down inflation.
How do you defend against this?
Do the math. Let’s make some assumptions:
1. How long will it take to go back to normal: 2 Years
2. How much extra interest will you pay: 2%/year
3. Average mortgage size: $600,000
The above is my guestimate.
Total Cost: $600,000 x 2% x 2 Years = $24,000
If you can afford the extra $24,000 in cost over the next 2 years with your income, line of credits, investments etc., then you are ok.
What should you do in this situation?
1. Run your numbers and know your numbers.
2. Structure line of credits against your properties(s)
3. Look at converting to 1, 2, 3 year fixed rates if the variable rate = fixed rates
What are investors going to do?
“Be greedy when others are fearful.”
Investors are going to buy in this market. They are going to structure line of credits/mortgages against their properties and prepare their financial position to qualify for lending.
What is a good strategy to buy as an investor?
With higher rates, cash flow is going to be restrictive. So instead of buying a $800k property with $200k down, it makes more sense to buy a $500k property with $200k down.
Which homeowners are going to buy in this market?
1. New home buyers as they are still paying insane amounts of rent.
2. Home buyers that want to upsize or downsize in a calm fashion.
Are there more risks to consider?
Let us use a 40-year-old making $120,000/year and will work till age 65.
Death: $120,000 x 25 years = $3,000,000 Risk
Disabled and can no longer work: $120,000 x 25 years = $3,000,00 Risk
Critically Ill: $120,000 x 3 Years = $360,000 Risk
The above risks make the interest rate risk look small. Something to think about.
What is the next step?
If you would like to discuss your options for mortgages & insurance, feel free to set a time: https://calendly.com/robertkleinmeeting/20min
Mortgage Broker & Commercial Realtor
Pacific West Mortgages Inc. & NAI Commercial (Victoria) Inc.
C: 778.896.6732 | F:604.648.9701
Visit our website at www.robertklein.ca
A Better Way to Buy and Sell Real Estate and 10 Things to Look for in a Real Estate Agent
This is a one-stop real estate website for all your home buying and selling needs in Vancouver, BC.
Contact us if you would like more information on finding your dream home or preparing to sell your home.
- Vancouver Real Estate
- Burnaby Real Estate
- Richmond Real Estate
- New Westminster Real Estate
- Port Moody Real Estate
RE/MAX Crest Realty (South Granville)
1428 W 7th Ave
Vancouver, BC V6H 1C1
Email Us or Call (604) 505-1647 email@example.com
10 Things to Look for in a Real Estate Agent
Whether you're buying or selling a home, you need the right kind of partner
Finding the right real estate agent to represent you can be challenging. There are many agents to choose from and almost every homeowner you meet will have a recommendation. It may take a bit of time but interviewing and evaluating agents is worth every minute. Buying or selling a home is no small task, so you want to make sure you get the right person in your corner. Here are 10 essential things to look for in a real estate agent.
10 Things to Look for in a Real Estate Agent (6 mistakes some Home Buyers Make)
- An active listener
- Good references or referrals
- Negotiation skills
- Effective Communication
- Strong online presence
- Decisions based on data
1. An active listener
You want to make sure that your agent listens to you when you speak and takes your wants and needs into full consideration. Your agent will be representing you in what’s sure to be one of the largest purchases or sales of your life, so making sure they understand your priorities is crucial. Look for an agent that remembers your wish list, contacts you when they see something that fits your needs, and who doesn’t monopolize your conversations. Good agents are typically good salespeople, but make sure they don’t try to sell you out of your own needs. If you don’t feel heard, it’s time to start looking for another agent.
2. Good references or referrals https://rankmyagent.com/annasmith
There’s no quicker way to find out what you can expect from your real estate agent than by contacting their previous clients. Some buyers and sellers skip this step when evaluating agents, but we’d highly recommend putting the time into getting honest feedback. Agents should come to listing appointments or meetings equipped with recent references, preferably in the cities you’re looking at. If your potential real estate agent was referred to you by a friend or family member, make sure you ask them in detail about how the agent operated on each of the nine other points on this list.
3. Honesty, especially in difficult situations
This can be hard to gauge, but it’s extremely important to find an honest agent whose opinion you can trust. Your agent’s experience and opinion on making or accepting offers should be extremely valuable to you, but that will only be the case if you can fully trust them to operate in your best interest. You want to find an agent who will tell you their honest opinion even when they know their thoughts won’t be pleasantly received so that you can truly make decisions with as much information as possible. An honest agent that stands by his or her instincts is indispensable when making difficult decisions.
Unlike some of the other items on this list, it’s fairly easy to tell whether or not an agent is passionate about their job and the real estate industry in general. You want an agent who is excited about getting the highest offer possible on your listing, or who is combing through new listings before you are to find you your dream home. They should know the latest Canadian real estate market trends and truly relish discussing them with you. Buying or selling your home should be an enjoyable process, and a good real estate agent who is passionate about their job can make all the difference.
5. Negotiation skills
They say a good real estate agent pays for him/herself, and the negotiation table is the place where this can really happen. Reading whether you should make a strong offer, a counter-offer, or a low offer requires a good understanding of both the seller’s situation and the listing agent’s negotiation style. On the other side of things, pricing a listing properly is somewhat of an art form that can set the stage for a successful negotiation and timely sale. Be sure that your agent has the negotiating skills needed to get you a good offer, or to get your offer accepted.
6. Someone with support
If you’re a first time home buyer, you might be surprised by just how many people you’ll need to be introduced to during your home buying process. Your agent should be able to recommend a notary, a mortgage broker, a home inspector, and any other potential service providers you may need during the home buying process. An agent who has built these kinds of strong relationships is likely someone respected in the industry, which should give you confidence when they are negotiating on your behalf. Before writing an offer…
7. Effective communication skills
Take note of how your potential agent speaks to you, how they treat other people, and how they communicate with the world on social media. You want to make sure your agent will be able to sell effectively which requires the ability to communicate clearly. One of the best ways to judge this is to see how they sell themselves when you meet them. If they make a strong case for you to use their services, you’ve likely found a good communicator that will represent you well.
8. A strong online presence
Don’t just evaluate your agent in person, you should also look at their online profiles to see how they’re selling themselves, and their client homes, online. Check to see if they have a following on social media, featured profiles on websites like REW, and where their previous listings were shared online. Typing their past sales addresses into Google Search will help give you an idea of where you can expect to see your property online if you list with them.
9. Decisions based on data
When you speak to a potential agent, you want to make sure they’re backing up their opinions and suggestions with hard data. Select an agent that knows the market inside and out, and don’t be afraid to ask specific questions about your area of interest and see what type of knowledge and insight they possess. It doesn’t have to be a formal pop quiz but making sure your agent knows the area you want to buy or sell in is important.
To be clear, we’re not suggesting you should only work with 20-year industry veterans. Experience is certainly not everything, but having it is an asset that you should consider when evaluating potential agents. Your agent should be able to provide you with examples of past buying and selling experiences that lead to positive outcomes. You also want to make sure that they know and have good relationships with other industry professionals, as they could be negotiating with them in the near future on your behalf.
If you find an agent that ticks off the 10 boxes above, you should be in for a great experience. To start the process, use this link to find an agent.
https://www.rew.ca/agents/94279/anna-smith/recommend?utm_source=agent+request+recommendation REW recommend Anna Smith
MILESTONE MOVE: TIMELY TIPS FOR FIRST-TIME HOMEBUYERS
Why finding a qualified real estate expert can help make the home-buying process more enjoyable.
Are you done paying someone else’s mortgage (goodbye, rent money!) and ready to find a home to call all your own? As a first-time homebuyer, the process of purchasing real estate can be daunting.
If you’re soon to buy your very first home, check out these tips to prepare for the tremendous (and exciting!) journey ahead.
Saving up and budgeting accordingly is the smartest way to enter the home-buying process, especially as a first-time buyer unaccustomed to the extra costs associated with buying – and moving. In addition to a down payment (which can be as little as 3%), ensure you have saved adequately for the closing costs, brokerage fees and the moving process.
When the time comes to submit an offer on a home, stick close to your budget. Any home you move into will have surprise costs down the line and especially as you get acquainted in the new space and decorate, so spending more than you bargained for upfront can usurp funds for maintenance and repairs.
Speak to a mortgage professional
Over the past year, mortgage rates have dipped to record lows, making it an appealing time for homebuyers who planned on taking out a mortgage to do so.
Before the home-buying process begins, first-time homebuyers should consider consulting a mortgage professional of their choice. A mortgage broker will be able to advise buyers on the advantages of pre-approval or pre-qualification, which can be important in today’s market where homes are selling quickly (and over asking price). Doing so will also help shape and determine a realistic price range of properties.
Start the property search online
Over the past year, buyers have taken to online shopping more than ever – especially for their future homes. Use advanced online resources – like remax.ca and the RE/MAX Real Estate Search App – to jumpstart your home search. Combing through listings online allows you to see a wider range of properties – and rule out some before it’s time to tour.
The “Favorite” feature on the RE/MAX app, for example, allows you (and any home search partner) to like, dislike and save properties all in one organized digital space. It's truly helpful when it comes to perfecting the home search from home.
Use a trusted real estate professional
When it’s time to make one of the largest purchases of your lifetime, don’t go through the process alone – especially in today’s fast-paced, competitive market. Working with a full-time agent who has expertise in all facets of real estate can help make the experience more streamlined and less stressful.
A trusted real estate expert knows the ins and outs of your local housing market, has fine-tuned negotiation skills, can identify (and tackle) issues along the way, and is prepared to find the best fit for you and any family members (pets included). Plus, real estate agents have tips and tricks specifically for submitting offers in a seller’s market.
Be ready to compromise
Remember that your first home won’t necessarily be your last. Know that you may not find a home with all of your dream features within your price point. This is why it’s important to make a list of “wants vs. needs” to help guide your home-buying journey.
What features can you live with in the meantime until you can renovate? And what features are a deal breaker? When reflecting on these factors, consider what budget-friendly DIY projects you could complete upon move-in to help make some of those less-desired features work for you. It could be fixes as simple as a new coat of paint, peel-and-stick wallpaper, resurfaced kitchen cabinets or new hardware.
Look at the whole picture
With the prospect and excitement of homeownership on the horizon, it’s easy for first-time buyers to get emotionally attached to properties throughout the search process. Remember to analyze each potential home holistically, considering location, accessibility, commute times and proximity to frequented places – in addition to the house itself.
Right now, homes are selling fast. This means it’s wise to not get too attached to any particular home in the event of being outbid or losing the sale. But don’t worry – your perfect first home is out there. It just may take you (and your RE/MAX agent!) a little bit of time to find the right one.