Is Now the Right Time to Buy a Home?

Is Now the Right Time to Buy a Home?

When it comes to the real estate market in Canada, there’s definitely a lot going on! From the recent mortgage stress test regulations and rising interest rates, to a decrease in the number of homes being sold, there has been no shortage of real estate news – news that may have many potential home buyers wondering whether right now is the right time to buy a new home.

Knowing the perfect time to buy a house can be a tricky decision to make. In fact, it’s often difficult to find the ideal time to buy. There are, however, a few things you should consider that may impact your decision.

Can you pass the test?

A measure introduced at the beginning of 2018 to help balance the markets, the new mortgage stress test regulations mean that individuals must prove they are able to financially handle mortgage payments with a 2% higher interest rate than their actual rate before being approved for a mortgage.

An increase in interest rates, and the probability of more increases in the future, may also have individuals wondering when is the best time to buy. Although the Bank of Canada has kept interest rates level recently, it’s predicted they will go up in the near future, which may mean higher mortgage payments, particularly if you opt to go with a variable mortgage rate.

Rising interest rates and new stress test rules are not all bad news, however. Although it may mean that you are able to afford less when it comes to your next home, it also means that not as many people are buying homes. Compared to the ‘seller’s market’ of the past, a slower market means more motivated sellers who may be willing to drop their asking price in order to seal the deal.

What about that debt?

When deciding whether it’s the right time for you to buy, it’s always important to look at your own personal and financial circumstances. Firstly, you want to be sure that you can financially handle your mortgage payments, as well as the costs associated with home-ownership such as utilities, taxes, repairs and general maintenance. This calculator can help you easily determine a ball-park figure for those costs.

It’s also a good idea to look at the amount of debt you currently carry. Consumer debt is definitely a problem in Canada, with many Canadians carrying a large amount of personal debt. If you have quite a bit of debt, particularly high-interest debt like credit card debt, it may be a good idea to focus on reducing it and even paying it down completely before you get serious about house hunting.

Finding the best mortgage solution

If, after considering these factors, you’re ready to buy, you’ll want to find the best mortgage solution possible. As an experienced mortgage broker in Barrie, I work with various lenders on behalf of my clients in order to do just that. Connect with me at 705-315-0516 and learn more about how I can help you find the mortgage that’s right for you.

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