Canadians are looking beyond the mortgage laws for a brighter future. The Vancouver real estate market will stabilize fully after the news take effect in March and April. The government-backed insurance will run dry in April and the down payment will soar to anything at or below 20%. The refinancing maximum rate will drop from 90% to 85%, allowing the homeowner to get out debt faster.
During this time, the best times to buy a home are now and lock in the 35-year mortgages that are still available to consumers. The new laws will shut down the old 35 and 40-year terms for a higher rate for a 30-year term. The silver lining is still available to new homebuyers and investors but time is running out. There will be higher monthly payments for the average borrower but in the long term. The monthly rates will pay down the mortgages faster in a shorter amount of time and the home can be owned in 30 or less years. Providing the home is not under a second mortgage or other terms.
The Vancouver real estate market will face some challenges after the laws are in effect but the only real issue with these laws is the stricter requirements on purchasing the home. A tougher line of credit will ensure a lower down but the market will fluctuate with an increased demand of buyers over sellers. This may cause another inflation of home prices in the richer cities, while the slower markets will have to play catch up or offer decent incentives. The slower markets are the best ones to go with at this time; the prices are ripening for the picking.
Besides the insurance withdraw, higher down payment (20% or less) the monthly payments will increase for most buyers. The trouble spot will be for the first time homebuyers that will not qualify for the mortgage terms. These restrictions will only be a slight turbulence to heavy investors and for those with a platinum credit line. The rest of the real estate market will not suffer much, once new time buyers have the ability to afford the downs and the mortgage payments. This is still a good time for buyers and investors to acquire new properties for personal gains, the monetary gains will pick up in the later seasons of 2011. The mortgage laws are a minor setback but a gain for the financial institutions for the time being.