home buyer mortgage broker

The age-old question “Is it a good time to buy a home?”

Jeff Evans

In my time as a mortgage broker, there have been many instances when I have been asked “Is it a good time to buy a home?”  If you were to hear the words of many Realtors, you would hear the words “Its a great time to buy a home”.  This may sound self serving, and to some extent, that may be correct.  The subject of this post is to dig deeper as to when it is a good time to buy, and what constitutes a good time to buy a home.

The first thing I would do is understand what the question means, which can vary depending on the person’s individual circumstances.  That question could mean “Is it a good time FOR ME to buy a home?”.  The question could also be “Is the current real estate market a good market to buy a home in?”  or “If I buy a home now, can I make money on it when I sell it?”  I will deal with these last two questions primarily.

The answer is that no one has a crystal ball to know exactly when to time a real estate market for maximum profitability.  Some people have lost money on real estate, and some will in the future also.  However, most people do make money in general, in Canada.  I feel far more confident in recommending the real estate market compared to the stock market.

The objectives of the decision also matter as to when it is a good time to buy a home.  Real estate is commonly considered to be a long-term investment.  If you purchase a property as a short-term investment or “flip”, you had better hope that it is a sellers market until you sell the property, and if not, you better be prepared for the possibility of it becoming a long-term investment.

If you are buying a property as a residence, and for the longer term, such as at least a 3-5 year investment, you will most certainly be ahead when you sell, not just for home value purposes, but for paying down the mortgage, increasing equity, and enjoyment of a residence that is impossible to put a dollar value on, but may be the best reason of all to buy a home.  In those circumstances, I will drink the cool-aid, join the choir, and say “It is a great time to buy a home”.  Given that it is difficult to know when to time the real estate market, you could speculate that the market will be due for a downturn, and could miss out on significant appreciation in property values, as clients I have met over the years have.

Last year, I had believed the market was due for a downturn.  The last two years, each September, the federal government had announced new changes in regulations regarding mortgage lending.  The Chinese government was cracking down on the outflow of capital from China.  Prices had gone up and up, and we are in the most expensive market in Canada, and one of the most expensive markets in the world.  Further, the banks have FINALLY started to make 35% down-payment, no income, no credit, foreign buyer/new immigrant mortgages more difficult to obtain (no thanks to the federal government).

Something was going to break sooner or later.  It is now in the breaking.  If you had bought in September of 2017, depending on the type of property and neighbourhood, you might have lost a bit of value by now, or you may have had a slight appreciation in value, but in another 3-5 years, it is highly doubtful, in my opinion, that if you sold your property that you would sell it at a loss.  As such, it was not the worst time to buy, and now that the market is cold, you have more choices and more room to negotiate the best deal possible for yourself, and possibly at a discount to what you would have paid last year.

The next question is when is it a good time to sell?  If you are moving up to a larger or more expensive property, a down market is a good time to sell as you would probably get a bigger discount on the purchase than the loss on the sale, but a hot sellers market is OK also.  If you are downsizing, holding off on selling could be good, but then you are facing an upward and competitive situation when you buy and you may not like your options as much.

In conculsion, yes, it is somewhat self-serving to a mortgage broker or Realtor to say it is always a good time to buy, but other than for short-term gain, I would agree with it, and while I am a mortgage broker and Realtor, I have at least clarified the reason with an explanation.

The only other element that you should consider when buying a home is if you can qualify, and for how much you can qualify for. To get an answer to that questions, give me a call at 604-318-1292.  I would love to discuss your options with you.



Author: Jeff Evans

I am a mortgage broker, hair salon owner, squash player, student, and husband, aspiring to do good for people.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Articles

Vancouver mortgage broker with “lower” fees
Jeff Evans
No Comments

I have had a in interesting case with a returning client who came to me recently for help with his mortgage.  As a mortgage broker in Vancouver, it is necessary to be creative in making solutions work for my clients, which currently can often involve secondary or private lending solutions.  This was a case where such creativity would be necessary.Read More

home buyer mortgage broker
First Time Home Buyers Mortgage Broker Tips And Tricks
Jeff Evans
No Comments

Among the services I provide to my clients, I consider myself to be a "first-time home buyer mortgage broker".  As a first time home buyer mortgage broker, I know how difficult it is to get into the real estate market, particularly in Vancouver, and it brings me a particular amount of job to help someone get past the challenges if being a first time home buyer.

I have recently completed an e-book and will be launching it soon.  I believe it will be very helpful for not just first-time home buyers, but for anyone who is not as knowledgeable in residential mortgage lending, about how to make your home buyer mortgage broker application appealing to a mortgage lender.

As a sneak preview, here are three tips on improving your mortgage application as a first-time home buyer.

3 Home Buyer Mortgage Broker Tips

  1. Take advantage of the home-buyers plan to fund your down-payment.  This program is not technically ONLY for first-time home buyers, but all first-time home buyers are eligible.  Under the plan, you can borrow up to $25,000 from your RRSP for the purchase of an owner-occupied residence.  If you and your spouse are both applying, then you can withdraw $25,000 each. It is a loan, so it has to be paid back over 15 years (or 1/15th of the loan will be added to income for that year).  However, there is no withholding when you withdraw it, it does not have to all be declared as income on any given year, and you don't even have to use all of it for down-payment!  You can use it for any purpose that you need it for. A good mortgage broker, like myself, can help you with some of the finer details and complex situations that often arise from these situations.
  2. Make sure you pay your bills on time. If you have a high balance on your loan, or you have a lot of debt, those also have a significant negative impact on your credit score, but you can get the bills down and there is no record of your high debt levels.  However, when you miss a bill payment, it stays on your credit bureau for 6-7 YEARS.  This not just negatively impacts your credit score, but lenders look at this when assessing risk, and they have been particularly uncompromising and (unreasonable, paranoid, strict...and other words that I cannot put in print) in the last few years.  While you likely do not have to wait 6-7 years to become bankable if you have had gone through a period of bad credit, the less negative credit on the bureau, the better. At least make the minimum required payments and you will go a long way to making yourself appealing to them.
  3. Having no credit is just as bad as having bad credit. Many people feel that not requiring credit should prove your ability to pay your bills and should be good evidence of credit-worthiness.  This is not how mortgage lenders think.  If you currently do not have any credit, then you do not have any documentation that you are an acceptable credit risk, and no matter how strong your income is, you will have difficulty obtaining a prime mortgage approval.  Make sure you have at least 3 different credit facilities in your name.  (Secondary credit cards in a spouses name are not considered acceptable for establishing your credit).

I am excited to launch my home buyer mortgage broker e-book soon, in which I go into much greater detail and give many different ideas to help home buyers prepare for home ownership, but as a mortgage broker in Vancouver, you are welcome to contact me in the meantime to discuss your circumstances and see if there are any options for you.

mortgage broker Vancouver BC
Good news regarding OSFI rule changes
Jeff Evans
No Comments

This is just a quick note to let viewers know that IF you are one of the people with 20% or more down-payment and are in a position that the new OSFI rule changes affect your pre-qualification, that I can extend the current guidelines into the new year by up to 120 days provided that I have an application and am able to get a pre-approval in place with a lender for you before January 1.Read More