What is the right time to Purchase Real Estate: In Canada, the housing prices that we saw earlier are finally going down. There is a decrease of about 1.7% from June to July 2022. A recession could be looming in the near future, which could result in decreasing the cost of real estate further down. Canadians are having a number of questions about the purchasing of real estate.
Just know about What is the right time to Purchase Real Estate:
While shopping for real estate you should consider these factors:
Inflation and interest rates: As opposed to paying for their home in cash, around 87% of home buyers finance their home. You will need a mortgage loan from the bank if you want to buy a new home. Due to the high inflation rate Canada has pushed a quantitative tightening policy.
Sellers’ market vs buyers’ market
In this the buyer’s market has more homes for sale. And if we talk about the sellers market there are more people than homes. According to the data collected by Wowa, Canada is still not in buyers market.
Some of the personal factors you should consider while shopping for real estate:
Credit score: You should have at least 600 score this is what most banks want to see. You may have a hard time finding a lender who will work with you, if you are having a score below 600. They will charge much higher interest rates, regardless of how good your credit quality is. You should check at least once a month to make sure that there is no fraud or chances of fraud on your account. Free credit score reports are offered by Canada.
Income history: Most of the lenders want to see that you have a reliable and good source of income so that you can make all the monthly payments on time without delay. So, this is one of the eligibility requirements. They also looks upon how you pay your bills on time and have acceptable level of debt. They look upon how you handle all your finances. They also make sure that you have enough money left over after paying your monthly expenses.
Down payment: 5% is the minimum down payment required by most of the banks.
Buying a house in 2022 is a smart move or not: So nobody can predict what will happen next. Due to increased interest rate prices there is a high probability that there will be continued downwards pressure on home prices.
If I was in your place, I would wait until the market flips more to the buyers market and we see some price relief before buying. In which city you want to buy the property it also depends upon that. Market movements of different regions of Canada are different. So you should stay on top of the area that you want to buy and you should watch it for the next few months.
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