- Fixed and Variable rates will remain at all-time lows.In July this year, the Bank of Canada Governor Tiff Macklem said the following, “Interest rates are very low and they are going to be there for a long time. Canadians and Canadian businesses are facing an unusual amount of uncertainty, so we have been unusually clear about the future path for interest rates.” We are going to see these low rates for some time to come. The Bank of Canada has always been very straightforward with their intentions and have been very predictable. There is too much at risk for them to change now.
- A Mortgage For Self-Employed Individuals Will Be More Of A Challenge.I know you’re thinking it’s already hard enough but the reasoning is simple. Lenders/banks use a 2-year average to qualify your income and a lot of self-employed individuals will have lower revenue in 2020. This means in 2021, your 2-year average income could be significantly lower than what it is right now using 2018 and 2019. If 2020 has hurt your income and you will need to qualify for a mortgage in 2021, it could make sense to look now so you can still use your 2018 and 2019 numbers.
- Past Mortgage Deferrals Will Be Scrutinized.If you deferred any mortgage or payments on credit cards, loans, etc, that will open up a conversation from a bank/lender if you’re looking for a new mortgage. They will want to know why you went into deferral and the story has to make sense to them. Right now, you can’t get a mortgage if you’re still in deferral. Be prepared to answer these questions because they will be asked.
- Mortgage Funds Will Be Harder To Attain For Everyone.While lending guidelines might not change much, the amount of due diligence from a bank/lender will. We are already seeing more questions about assets, credit reports, income, etc, Banks/lenders will be more cautious and will go through a deeper analysis of each file. Regardless of how solid your financial situation is, be prepared for more questions and requested paperwork than usual.
The mortgage world can be confusing which is all the more reason to have a mortgage expert help guide you through these crazy times.