How This New Mortgage Trend Can Affect You
COVID-19 has created instability in employment, which has left banks trying to minimize the risk of defaults and subsequent losses. Therefore, banks are being more careful than usual in identifying and confirming sources of income for mortgages.
It means that mortgage pre-approvals that may have been approved in the past aren’t guaranteed today. Consequently, if established lenders are not approving financing, home-seekers are resorting to alternative sources.
However, it does not solve the problem, as home-seekers will have to pay higher rates and fees, which will increase the risk of struggling with monthly payments, and those who cannot spend more will be left in a challenging situation.
Therefore, before things turn sour and a job loss or a reduction in income becomes a reality, it’s time to act. Firstly, have a backup plan for your savings, and make sure your life insurance policies are up to date and cover your needs.
Also, consider upfront debt consolidations, where equity can be taken out of funds and set aside in investments that can get easily accessed in the event of an emergency.
Finally, consider refinancing, as there are ways of investing the funds in returns that match or even exceed what the new mortgage is costing you. Even if you don’t need the cash right now, use this advantage to make money with the banks’ cash.
We need to accept that the next several months or even years will be unstable, and while we cannot predict the future, it can undoubtedly be anticipated. So if you need some assistance, give me a call today.
With two decades of experience, Victor Matos- Mortgage Agent- Insurance and Investments Advisor will help you secure a mortgage. I render honest advice and make myself readily available to assist clients.
I serve clients across Hamilton, Oakville, Burlington, Binbrook, Ancaster, Brantford, Caledonia, Grimsby, Stoney Creek, Cayuga, Dunnville, and St. Catharines, ON.