May might mark the month when many Canadians are breathlessly waiting for income tax refunds, but it is also the time when prospective home buyers can enjoy a little good news about home prices dropping across the country.
According to the Canadian Real Estate Association (CREA), the country’s average home price fell to $491,000, a 10.4 per cent drop from the same time period a year ago. The CREA reported further home sales also increased by 1.3 per cent in the first quarter of 2018.
Analysts say the drop has happened because of a number of factors that include a shift in sales mix and changes in mortgage regulations which affect both the demand for lower-priced homes as well as the number of qualified buyers.
For those who might find this drop-in-price news motivating, experts are recommending they consider three important tips to help secure the best mortgage:
The first is shopping around for the best mortgage which doesn’t necessarily mean simply securing the lowest rate. An effective mortgage plan includes generous prepayment privileges and room for portability. A portable mortgage means home buyers can transfer their mortgages to new homes if they are moving or even combine it with another loan if necessary.
The second is making lump sum payments as frequently as possible. They are known to reduce mortgage interest substantially not to mention years off the amortization period.
The third is accelerating mortgage payments. By accelerating payments, amortization periods can be shortened substantially which can amount to thousands of dollars in savings.
Financial analysts also recommend talking to a qualified mortgage broker, such as myself, who can offer expert advice on everything from market trends to future market forecasts.
[Source: Verico]