I checked with Environment Canada, the sky isn’t falling. I’ve seen worse in terms of housing market less than a decade ago (the year 2008). Of course, many homeowners and prospective homeowners are all in different situations. Your specific situation could mean the difference between saving thousands and costing you thousands of dollars.
Here is a quick rundown of what you may want to know:
Should I Sell?
This is an easy answer: depends. Upsizing or downsizing? If you are wanting to sell a smaller home and buy a bigger house then you might consider waiting until late summer or fall 2015. Conversely, if you want to downsize, consider listing very soon. On the same topic though, don’t buy until you have an offer. It could take you over half a year by the time you think about listing to the time your buyer takes possession. Call me to discuss your situation and why I think this way.
If I lose my job, what do I do?
If you have at least 6 months of savings, low debt, and a good mortgage in place, congratulations, you aren’t the norm and you will likely ride the storm. If you aren’t that lucky person then you may need to look at the equity in your home. If you have a mortgage coming due for renewal in the next 15 months then you need to consider refinancing NOW (call me). If you are locked into a mortgage for longer than 15 months then there are other great mortgage options to consider to ensure you have access to your equity in the event you need it. Perhaps even selling your home is an option. Selling your home is an option if you don’t have a lot of equity and no savings. Talk to me before you make that rash decision though.
I have a lot of debt, what are my options?
Debt reduction will be very important in the year ahead. If you have debts and are considering downsizing your home then selling might be a good option to reduce debts and payments (but careful, the costs might actually make it a poor decision once you take everything into consideration). If you have a really good long-term, low rate mortgage in place, there are fantastic lines of credit or alternative mortgage options available. In many cases, these alternative mortgage options save people thousands in interest costs. Furthermore, for those faced with a reduced income, an alternative mortgage can also dramatically improve your monthly cash flow. As mentioned before, if your first mortgage is up for renewal in the next 15 months you need to talk to me ASAP. Your window to refinance to consolidate debt is closing fast. I mean really fast!
I want to buy my first house, should I?
Do you have a job and a steady income? If so, yes. If not, maybe not. Income is everything these days when it comes to obtaining your first mortgage. You could have a solid net worth but a small income and you would be less likely to get a mortgage than someone with no assets, high debt, but a large income. Crazy I know! Also, refer to my comments on waiting until summer for prices and supply to be more in your favour. If you are wondering if renting is still better than owning…..NO, you can’t just look at the cost of monthly rent vs. the cost of homeownership. You need to look at opportunity cost and long-term benefit. When you look at the internal rate of return of owning vs. renting, regardless of the market, you are almost always better off buying if you can afford it. Call/email me to discuss and where to start.
To sum it up, if you have a mortgage coming up for renewal in the next 15 months then you should talk to me about it. If you are panicking, relax, the sky isn’t falling. If you think home prices aren’t going to fall more, you need to discuss with me. If you are wondering about selling a home in this changed housing market, I can give you the cold hard facts.
You have a specific question so just send me an email or call me and we can talk about it. 403.701.7766 or firstname.lastname@example.org.