Record low mortgage rates have played a significant role in driving housing market activity during the COVID-19 pandemic. With inflation on the rise and the pandemic hopefully nearing a conclusion, mortgage rates have begun to increase.
Angela was asked three questions by the Real Estate Board of Greater Vancouver about what she’s seeing in the market today. Here are her answers:
Interest rates have just gone up – do you see more increases coming this year?
Yes, we are expecting increases. However, there’s no reason to panic if you properly plan for the eventual rise. Managing your mortgage to ensure no future payment shock and reviewing your debts outside your mortgage to include them to utilize the equity in your home will help your financial house with rising inflation and interest rates. I’m still a variable rate mortgage holder myself, as the spread of approximately 1 percent between the rates ensures that money goes to my principal in a mortgage instead of guaranteed interest.
With uncertainty around the globe, rates will continue to rise but I don’t believe the speed or spread will impact the benefit of the variable rate discount and principal paydown if you adopt the strategy of paying your mortgage as a fixed rate.
What consumer trends are you seeing as people prepare for interest rate increases?
We’ve been seeing clients refinance early to take advantage of low-interest rates and renovate their homes, give themselves an emergency fund, or pay the outside debt. We’re also seeing parents take out reverse mortgages to gift down payments to their children instead of co-signing their mortgage.
How can reverse mortgages help people in today’s landscape?
A reverse mortgage helps borrowers over 55 purchase their downsized home, vacation home, or rental property with no impact on taxes or cash flow. They can also help you pay off existing debts while keeping your credit in check since you’re not required to make monthly payments, but rather pay it off once the house is sold.
Parents can use a reverse mortgage to gift money to their children for home purchases or education without taking out their retirement funds. This also allows them to keep their credit intact in the event they need to use it.
They can also be used to help navigate divorce for themselves or their children, or the loss of a spouse. Whereas traditional mortgages or lines of credit need to be requalified after a spouse passes away, reverse mortgages have lifetime approval.
This article was taken from the REBGV Blog
Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages.
In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.
Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.
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