Winter Homebuying! A Few Tips To Get Settled In Before The Summer

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Heavy restrictions are making it difficult for people to make life changing decisions such as buying a house this winter. However, if you’re a qualified buyer, you could definitely consider it! Canadians will be spending more time at home this 2021 winter – living, working, studying, playing, working out, and so on. Is there really a need to wait until spring to look for the comfort and security of a home that meets your needs?

Winter 2021 is DIFFERENT

Even before the pandemic, Canada’s real estate market faced upward pricing pressure as a result of growing demand and low supply.

When the pandemic hit, the early spring real estate market (typically the busiest time of the year) slowed to a trickle as the country locked down for public safety. But once restrictions were lifted in summer, sales boomed – and in many parts of Canada, the momentum has barely slowed.

“The conditions of the typical spring, summer, fall and winter markets are out the window now. Home prices are up, demand remains high and supply remains low and I’ve been seeing up to 30 offers on a house,” explains a real estate agent.

Their advice: whether you’re a qualified first time buyer or a homeowner looking to move up, now’s the time to strike. Agents expect demand for single-family detached homes to grow through 2021 and 2022 irrespective of COVID, and for prices to rise accordingly.

So, while buyers may not snag any unique winter deals, they’ll probably find lower prices compared to now versus spring and summer 2021.

2: Get pre-approved first!

Unlike the sleepy winter real estate market of years past, winter 2021 is about acting fast, says another expert. They recommend lining up your financing before you do anything else.

“Get your mortgage sorted first – that’s a good piece of universal advice for any time of year. Get pre-qualified or pre-approved to buy so you know what amount you are approved for,” adds the expert.

Knowing how much of a mortgage you qualify for lets you focus your house hunt, and assures sellers and Realtors you are in the market to buy, not window shop.

Virtual vs Physical

While real estate and mortgage companies are more agile and digitally oriented than ever, be aware that bottlenecks down the line can slow the financing process.

“There were a lot of changes to the mortgage market due to COVID-19 and a lot of things can be done virtually. Even with clients who are not tech savvy and don’t use the Internet a lot, we have ways to get their bank statement, tax documents and so on; there’s no need for paperwork or scheduling in-person meetings,” they continue.

Talk to a broker

If you’re selling your home to buy a new one, chances are you’ve got an existing mortgage. Should you pay it off from the proceeds of your sale and then get a new, hopefully lower interest mortgage for your new home? Or should you port the existing mortgage to your new home?

“It depends on the pain factor: What’s the penalty to break the existing mortgage and what’s the interest rate, versus what would be the new interest rate if I broke out? Let’s say I’m paying 2.24% interest instead of a possible 2.04%. But .2% on average is less than a $20,000 pre-payment penalty, so in this case, with the high penalty, it would be better to port and finish out the term. But if the prepayment penalty is small, and let’s say I’m paying 2.89%, then it would make sense to pay it off and get a new mortgage for the new property at 1.99%,” says the expert.

Bottom line: read the fine print of your mortgage and tap into the knowledge of a professional mortgage broker. They’ll help you determine what option will cost the least to you since they work for you (not the banks!).

Be prepared!

Time is of the essence when buying a house this season. Lay the groundwork to act fast in the event you find a home you like.

A professional adds that the groundwork says it is crucial to be ready to go, once you start house hunting. “Get pre-qualified. Get a good mortgage broker and set up your real estate support system, with a Realtor, home inspector, your lawyer, your broker,” she explains.

Once that’s set up, start your search. “Look at homes virtually first on MLS or Realtor sites, then do a drive-by to see what the street looks like – the neighbourhood, the topography, the home’s exterior – and then the final step would be if you’re still interested, meeting your agent and wearing a mask to look inside,” she explains.

Winter may not be the traditional time to buy a house, but if you’re ready and qualified, there’s no time like the present.