Home Truths and Mortgage Myths

With so much uncertainty and media hype in the marketplace, this is a good time to sort through a few common misconceptions.

Here are five of the most often heard myths we take time to dispel to help both buyers and sellers.

"Canada’s market mirrors the US real estate meltdown”

Thanks to our stricter lending policies, default and foreclosure rates are significantly lower here than south of the border. Canadian national average selling prices for home at December 2008 declinded by 11% from 2007, but according to The Canadian Real Estate Association, we are far from the fire-sale prices in the U.S.

“This is a bad time to buy real estate”

By owning instead of renting, you are building equity. You also benefit from today’s historically low interest rates. It’s important to stay alert to buying opportunities. Remember, real estate prices are cyclical by nature. When prices start rising, homeowners will be glad they have a foot on the property ladder.

“I will be penalized for paying down my mortgage”

Many mortgages allow you to make additional payments towards your principal without penalty, either as a lump-sum payment or by increasing each mortgage payment. This is a great way to save on the long-term cost of interest and decrease the length of your mortgage, especially with today’s low interest rates.

“Choosing a condo with low maintenance fees is a good way to keep costs manageable.”

It’s important to find out what the fees do and don’t cover, and whether there are adequate resources in the reserve fund. Those bargain condo fees could cost you plenty if they’re insufficient to maintain the building in good working order, or if a special assessment is levied.

“I have to keep the same mortgage terms when I renew”

Renewal is an opportunity to reassess your financial situation and make adjustments to suit your current needs. You may consider changing the length of term, switching (from variable to fixed rate, or vice versa), altering your payment frequency, or even changing lenders.

We’re here to answer your questions. Talk to Lisette about financing and mortgage options that are right for your situation. 905-529-1199