Capital Mortgages opened in January 1999 and has since serviced thousands of clients and arranged several billion dollars in mortgages in Ottawa area.

What To Know About Re-Financing Your Mortgage Throughout COVID-19

What To Know About Re-Financing Your Mortgage Throughout COVID-19

The ongoing pandemic has thrown all of us for a loop, with many people either being temporarily laid off, having their salaries cut or being let go altogether. It’s a scary and unprecedented time that is leading a large percentage of Canadians to consider whether they should refinance their mortgages. Doing so will allow them to give themselves a safety net by potentially resetting their rate to be lower, reducing their payments or pulling out equity from their homes in the event of job loss.

Here are a few factors you should keep in mind when planning to refinance your mortgage:

  1. Refinances are not urgent for lenders – Your refinance request will be a third priority (or lower) for lenders after new purchase and lender switches. Coupled with the high demand for refinancing right now, keep in mind that it might take a lender longer to reply on your application.
  2. You may be required to pay a penalty – You’ll have to pay a penalty if you break an existing closed mortgage to refinance. These fees can range from $1,000 to several thousand dollars – check your mortgage contract to determine how your lender will calculate your penalty. Here is a helpful list of penalty calculators by major lenders. 
  3. Employer verification will be strict – Given the situation we’re currently living through, your lender might make you prove that you will not be laid off during the economic shutdown if you don’t work a job that has been deemed to be essential
  4. Fluctuating ratesKeep in mind that mortgage rates are fluctuating often right now, even though the Bank of Canada slashed its overnight rate in March. Make sure you’re not overpaying for a fixed or variable mortgage and consider a cheap shorter term if you’re able to find one. Rates will likely return to normal once we’re through the worst of the pandemic.
  5. Opt for a home equity line of credit – A HELOC is a great alternative to using credit cards for a source of emergency liquidity. Payments are usually interest-only and you can generally borrow at your lender’s prime rate plus a variable of approximately +0.5% to 1%, versus the higher interest rates of credit cards. Note that you’ll need an excellent credit score and stable employment to be approved.

 

Refinancing your home can be a complex decision when considering all of the factors involved. Don’t hesitate to give us a call at 613-228-3888 if you require more clarity on your mortgage’s details, we’d be happy to walk you through it.

At Capital Mortgages in Ottawa we strive to be your personal mortgage broker for life.

Canadians confident in housing, but most not ready to buy

Survey results suggest most Canadians feel now is a great time to buy a home, but not for them personally.

A poll done for Royal Bank of Canada found 59 per cent of those asked said now is the time to get into the housing market, as opposed to waiting until next year. That was up four percentage points from when the same question was asked in a survey a year earlier.

However, 73 per cent said they are unlikely to buy a home within the next two years, up two points from the previous year.

“There’s a mix of opinions on the housing market as Canadians still feel confident about real estate but are a little uncertain about where the market is heading and when it makes sense to buy,” Marcia Moffat, RBC’s head of home equity financing, said in a statement.

**When it came to property values, Quebecers were the most confident homeowners in the country, with 78 per saying they could withstand a potential downturn in house prices, compared to 74 per cent nationally. Yet 57 per cent of Quebecers – slightly below the national average – said now is a good time to get into the housing marking.

Not surprisingly, 69 per cent of Albertans said now was a good time to buy a home, with commodities-fueled growth driving a housing boom in that province.

Nationally, 88 per cent considered housing a good investment – including nine out of 10 Ontarians, despite concerns of a condo bubble in Toronto – while 68 per cent said the value of their homes had increased over the last two years. Just 47 per cent of Canadians said housing prices would be higher a year from now.**

The survey was done with 2,006 adult Canadians in an online panel by Ipsos Reid between Jan. 24 and 30. A random sample this size would have accurately represented the population within two percentage points, 19 times out of 20, RBC said.

Meanwhile, real estate firm Royal LePage released a report Thursday saying housing prices in Canada were up in the early part of this year after an “unusually high” number of sales resulted in tight inventories. Record-low mortgage rates at less than thee per cent, on five-year fixed plans, were part of reason why activity was so high, Royal LePage said.

It said the average price of a standard two-storey home in the first quarter was $398,282, up five per cent from a year earlier. The average bungalow price was up 4.4 per cent to $356,306, while the going rate for a condominium rose 2.2 per cent to $243,153.