Its a new year, a new decade and everyone thats buying, renewing, refinancing or in the real estate cycling wants to know what mortgage financing in 2020 is going to look like.
In my opinion, lending in 2020 is going to be similar to the second half of 2019, unless the government or lenders change policy or get creative in the way we underwrite and structure mortgage lending. With that being said, 2019 wasn't a bad year. This isn't doom or gloom and I'm super positive in the outlook of lending in 2020!
The stress test hurt single income earners looking to buy or young couples looking for their first home or "move up home" but it didn't stop buying - it just changed the amount one qualifies for which may have changed around the purchase price, the location or changed the time horizon around a bit to save for a larger down payment. We also saw family members like parents get more involved in supporting down payments or co-signing for mortgages.
In 2020, Im emphasizing the importance of a pre approvals which is similar to 2019 - for all buyers and Im asking clients to shop at renewal. There are so many positive benefits getting pre approved. From locking rates to knowing what you qualify in todays underwriting environment. We helped many clients get pre approved win multiple offers, be better prepared for short condition of financing periods and turn around quick closing dates. We also saw way too many renewal letters at rates not market competitive and help customers the most competitive terms in the market at that time.
What gets me really excited about 2020 is the niche lending solutions. I am very positive on lenders being more open to business for self clients, the addition of net worth lending and the amount of capital available for land acquisition and construction financing which we are very involved in. I've even seen rates surprise in the private lending space and we are getting more creative in making deals work. I love programs like purchase plus improvements which should be a realtors dream solution to getting home sold and helping clients get into more affortbale homes.
What doesn't change, year over year is the importance of relationships and self education. Working closely with lenders and understanding underwriting, new programs, government change help customers and referral sources get more Canadians in homes. It helps more Canadians refinance properly, Renew with best in market terms and make the home buying process easier! It also makes going to work fun and rewarding. My best guess on where lending will go in 2020 is as good as any other seasoned professional in the industry but I can absolutely promise with our team is great service, a wealth of experience and great people to work with and have some fun along the way.
Make 2020 the best everyone!
Sincerely,
Scott Westlake
416-436-1135
Scott@thewestlaketeam.com