The Latest Trends in Mortgages and Home Loans for 2021 and Beyond

Introduction

Purchasing a home is one of the biggest investments most people make in their lifetime. Mortgages and home loans are an essential aspect of homeownership, playing a significant role in determining the type of property, location and other factors. It’s important to stay up-to-date with industry developments to get the best deals available for your unique circumstances. In this post, we will explore the latest trends and movements in mortgages and home loans for 2021 and beyond. We will also explain how SmartHomeLoan.ca can help navigate through these changes.

Current State of Canadian Mortgage Market

The state of Canada's mortgage market has been greatly affected by COVID-19. The pandemic led many homeowners and potential homeowners to reconsider their investment choices, leading to lower housing transactions levels in 2020 compared to previous years. However, despite these disruptions, predictions show that rates may trend upwards as economies recover from the pandemic crisis.

With higher interest rates appearing imminent for future years, it is crucial to remain aware of significant shifts in demand. Pre-approval processes are becoming more popular among buyers who want protection against sudden increases in interest rates before they find their dream homes.

Refinancing Options

We often hear about refinancing our existing mortgage but what does that actually mean? Refinancing refers to taking out a new loan or mortgage at a different rate or term length than your current one. There are several reasons why you might consider refinancing your mortgage; including reducing monthly payments, consolidating high-interest debt or accessing equity.

In Canada there are two primary types of refinancing:

1) Traditional Refinance: By replacing your existing mortgage loan with a new one you can access a better rate.

2) Home Equity Line Of Credit (HELOC): This option allows borrowers access credit based on the equity established within their first-mortgage loan.

SmartHomeLoan.ca works hard to assist its clients in finding and executing strategies where refinancing can improve their finances.

Government Programs that help with Mortgages and Home Loans

The Canadian government has initiated several programs to make homeownership more affordable. Some of these initiatives include:

1) First-time homebuyer incentive program – This program helps qualified first-time buyers with down payments, reducing upfront costs.

2) Home Buyers' Plan (HBP) - Helps allows you to borrow money from your RRSPs to put towards the purchase of a property without having to pay tax on it.

3) Canada Mortgage and Housing Corporation (CMHC) can offer mortgage insurance for those who are deemed high-risk applicants with down-payments less than 20%.

SmartHomeLoan.ca assists in accessing all of these programs by working with clients to tailor a package specific to their situation.

Pros and Cons: Reverse Mortgage vs Home Line of Credit

A reverse mortgage is an option for Canadians aged 55 plus that provides them access credit while still living in their homes. With a reverse mortgage, you must only pay back the loan when the property is either sold or when the borrower passes away.

HELOC, on the other hand, acts similar to reversing a traditional mortgage; allowing borrowers access credit based on established equity within your home. SmartHomeLoan.ca offers counsel through years of industry experiences regarding much which option is most advantageous for individual circumstances.

Conclusion

In summary, there are many options available when considering mortgages and home loans as well as a range of factors that come into play during each transaction. It is important to stay up-to-date with market trends so you can take advantage effectively. SmartHomeLoan.ca's broker team offers exceptional service focusing upon what matters utmost; placing our clients secure in making comfortable financial decisions towards homeownership without complications.

References:

Canada Mortgage & Housing Corporation - https://www.cmhc-schl.gc.ca/en/how-to-buy-a-home/financial-assistance-for-first-time-homebuyers

Financial Consumer Agency of Canada - https://www.canada.ca/en/financial-consumer-agency.html