When purchasing a home, many clients ask “Do you think it’s a good time to purchase? Are the rates going to go up? There are many excellent properties for sale on Vancouver Island especially in the Nanaimo area that offer you, the buyer, incredibly low monthly payments. In many cases lower than what you would pay to rent so if you qualify for a mortgage, why not consider buying?
Check out our featured listings that offer incredible low monthly payment options!
Below is an interesting article from the Bank of Canada.
Bank of Canada governor Mark Carney indicated today that rates will stay where they are for a while as a result of global economic uncertainty. Great news, but what things should we be thinking about now?
Perhaps we should be strategizing about our borrowing and investing. Here are some things to consider:
1. Canadians owe too much money.So take this opportunity of a low interest rate environment to tackle that debt. That will put you in a better position when the time does come that interest rates rise.
2. Variable rate mortgages look great right now. The major banks’ prime rate is now 3%. Most will discount that rate by .45 to .70 of a percentage point. This is much lower than the current 5 year fixed rates of 3.45 to 3.59%. Yes the prime rate will rise eventually but in the meantime you are saving a lot of money with a variable rate mortgage. One great tip to consider is to pay your mortgage as if you were paying a fixed rate.That way you will reduce your principal at the same time as getting used to paying a higher payment when rates eventually do rise.
3. Not quite sure you want to go variable? Then why not consider some sort of hybrid of fixed and variable.Some lending institutions will allow you to split your mortgage up into several components. You could put part of the money into a variable and part of it into a fixed. Best of both worlds!
4. If you have money to save, high interest rate savings accounts and money market funds are really paying low returns due to the low rate environment we are in. Be careful not to take on too much risk to get higher returns on money you cannot afford to lose. Make sure you are getting good investment advice!
5. Lines of credit are a good option for borrowers. If you must borrow, a home-equity line of credit remains the best way.Expect to pay prime plus .50 – 1.%. Keep in mind the danger of running them up too high though. They are not meant to help you afford stuff, they are for strategic borrowing to bridge a short period between the time you buy something and the time you can afford to pay it off in full.They are great to use for investment purposes also.
6. Credit cards can mean disaster if not used properly. Credit card rates are not going to reduce and are unaffected by what the Bank of Canada does. Get a credit line and pay off your credit card balances as soon as possible.
So let’s use this extended period of low interest rates to really get ahead.
For specific mortgage information ask Invis 1 250 897 3550 or Real Estate Questions call John Cooper of RE/MAX NANAIMO 250 619 9207
