"Re/Max is forecasting continuing balance conditions for the Oakville housing market in 2020."
What we look at is a Mortgage Brokerage is whats driving demand. According to the statistics below, "move-up-buyers" are driving this demand. The reason this is important from a lending perspective is move up buyers already own a home, probably have a mortgage and therefore more variables are in play compared to buying ones first home.
If breaking a mortgage is a consideration to enter into a new mortgage, the penalty has to be considered and calculations done to see if warranting a new better rate (if available).
Porting a mortgage may be an option if the lender allows and the penalty is larger then the interest savings taking on a new mortgage with better rate.
Adding to the complexity could be renting the existing home versus selling. One must consider the rental offset a lender may use to see if they can debt service both and if they have enough of a down payment without selling the home OR can obtain equity for the downpayment by refinance the existent home while servicing both mortgages.
Other factors we consider when looking at this report, is the fact that the "popular property" is a detached home which is different then buying a condo. From a financing perspective its pretty similar but appraisals can be a big item to ensure value and also ensure the life expectancy and overall condition of the home.
The other item to consider is the average price point is above $1M. Some lenders don't finance or offer their most competitive pricing on homes North of $1M and some lenders apply a sliding scale pending how North of $1M the purchase price is. This impacts clients and realtors if there is an assumption (which we often see) that the down payment is exactly 20%. It could be substantially more or exactly 20% pending certain variables. When purchasing North of $1M, the down payment minimum also changes and requires a minimum down payment of 20% compared to buying under $1M and obtaining financing with less than 20% down payment.
What all of this means is you as the consumer, is that you need a good team around you when buying in 2020. Lending is more complex today than a year ago and buying your second home can be more complicated than your first. Its not daunting and should be an exciting time - its just an important time to surround yourself with the right people. When looking for a mortgage broker, check their reviews, ask for recommendations, ask if they have financed homes in the price point your buying or dealt with the circumstances your encountering.
For more information or help financing your next home, please connect with our team. You can fill out any of our webforms or email,
scott@thewestlaketeam.com or call 416-436-1135.