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  • Writer's picturePaul Therien

Should you buy, sell, or wait?

More and more Canadians are finding the current housing market to be both confusing and highly stressful. There is so much chatter and information being served up online that sorting through all of the noise often just adds to the stress.

Before the question of buying, selling, or waiting can be answered there are some very important things that need to be considered before making a change. For most mortgage professionals they will sell rate as being the ultimate factor, but a low rate does not mean a good mortgage or product.

What should absolutely be considered long before rate is the impact that your decision will have on your short, and long, term financial health. If all you consider is the interest rate and the monthly payments that result, you could be missing out on some fundamental truths around owning a home and the things needed to be addressed.

While you may be able to afford the minimum mortgage payment, what of the costs to insure the home, property taxes, maintenance costs, Strata fees (if Condo), unexpected expenses (repairs), and more. Owning a home is not just about making a mortgage payment, there are so many other things to be considered - and most importantly how those items impact your ability to live a healthy lifestyle.

Some people believe that a mortgage is a mortgage is a mortgage, but given the sheer amount of money being borrowed and the broader implications that may arise in the event of trouble... well, it has to be about more than simply rate. Getting a low rate and still being able to barely afford the payment will force you to make significant sacrifices in other areas of your life - knowing how your day to day life is impacted matters. There isn't much point in owning a home if you cannot afford to do anything but work and sleep because you are trying to keep up.

Rates have increased, and while we do expect them to start to decline in the coming months, that is not guaranteed, and if all we do is rely on rates going down to afford our home... it might be time to review our circumstances and make changes as needed.

When you are consulting with a Haystax Mortgage Professional you can rest easy knowing that they are here to look out for much more than just the lowest rate. We want to make sure that the product you end up with propels to towards your financial goals, not hold you back from achieving them.

As an example, many Canadians were counselled to take variable rate mortgages while rates were really low. Here at Haystax we have heard from thousands of Canadians that found themselves in serious trouble due to the rapid increase in their monthly payments. The vast majority of people who we speak with in a variable mortgage do not, and did not from the start, have the financial means to sustain their payments in a rate increasing environment.

Did these borrowers get bad advice? Not necessarily, but it is clear that they were not well prepared for all eventualities, and most likely simply did not understand the risks associated with a floating rate. For many of the people we discovered that even a 0.25% increase would push them to their max and impact their lifestyles. Now imagine those same people having to manage a 4.75% increase - it is clearly going to be an issue.

Whenever you are working with someone in regards to obtaining a mortgage, make sure that all of these risks are clearly explained to you. Never be afraid to ask questions and keep asking them until you understand exactly what you are signing and the impact it may have on your life. If you are not getting that service today, it is probably time to switch to Haystax for your mortgage needs.

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