What Is Happening In The Mortgage Industry?
In the last few months, the Covid-19 pandemic has brought the economy down to an all-time low. This has shaken up every industry and led to different trends across every market. In the mortgage industry itself, there have been several recent changes, and experts expect to see more in the following months and years.
To overcome these changes, being aware of the current trends and future possibilities is essential so you can plan your home purchase decision accordingly. But, if you’re new to the mortgage market and home buying scene, learning about the mortgage industry and its state of affairs can be challenging. If you’re not thorough with what’s going on in the industry, you could lose out on some fantastic opportunities that save you money.
To help you understand what is happening in the mortgage industry, The Mortgage Girl, Jackie Woodward, has explained the current market situation along with three possible trends. Keep reading to see how they can affect your property purchase decision.
1. Mortgage prime rates are likely to remain stable
Recently, the Bank of Canada has indicated that they will leave their prime rate as is for the foreseeable future. They feel that even though the economy has improved, there is still a need for their intervention. In this case, those clients with variable mortgages and lines of credit will see no fluctuations in their interest rates should they remain steady.
Similarly, those homebuyers who wish to apply for variable-rate mortgages or lines of credit will be able to enjoy a static interest rate for the next couple of years. However, there are possibilities that this may change, but no one knows when. We believe that the stable rate will affect the whole mortgage industry as rate stability is always essential when informing clients about variable mortgages. Additionally, this trend will have positive effects on clients with variable rate products, and their ability to add extra money to their mortgage will also be a possibility.
2. Housing prices may fall
According to some industry experts, housing prices will fall next year in 2021. But other experts in the mortgage and housing business are not in agreement that this will indeed happen. This much is certain, if housing prices fall, buying real estate for long term growth will be wise as property value can always increase. Besides, for those who want to buy property, lower house prices will make purchasing easier. On the other hand, short-term price drops will only affect homeowners if they want to sell.
3. Mortgage brokers will be in demand
As the economy continues to recover, more people will move to mortgage brokers to get the best rates and services. As mortgage brokers, we are well connected with several lenders and know where to get the best terms and rates for our clients. Additionally, we are more knowledgeable of the mortgage market and can guide clients through a broad range of challenges.
From our perspective, the increasing demand for our services will allow us to serve more clients and build our businesses with time. That said, we will also need to create a supportive strategy that helps us cope with client demands.
Given the market conditions we are currently facing due to COVID-19, the mortgage industry is bound to experience a change in some form or the other. While predictions can be made about the future based on current trends, they cannot be guaranteed. Everyone has an opinion of what may occur, but only time will tell. Instead of focusing solely on predictions, we need to base a majority of our decisions on what is happening right now. And not only prepare for what may or may not happen. But to work with the current state of affairs, you need to understand the industry.
To have an informative discussion about the lending industry and what can be done about your mortgage today, get in touch with The Mortgage Girl, Jackie Woodward. As a leading mortgage broker with over thirty-five years of experience in mortgages, I can guide you through the mortgage process and educate you about the current market trends so that you can take advantage of them. Based on your financial position, I also help you find suitable mortgage rates and terms. If you have specific goals in mind (for example, home renovations), I enable you to incorporate those into your mortgage as well.