What Has Changed In Mortgages Since COVID-19

So many property owners are concerned about the current status of mortgage rates and rules during COVID-19. It appears that so much is influx during this time, but this is not really the case. The Toronto real estate industry is not really impacted financially by the pandemic.

All banks have reduced their interest rates tremendously since the beginning of isolation. People all across the Greater Toronto Area were looking to refinance their mortgages, to the point that lending institutions were overwhelmed. Banks are now starting to tighten up their requirements, they want confirmation of income at the very beginning to ensure that it can be afforded due to so many layoffs happening and to avoid a request for deferred mortgages. If you can prove that you will continue to have a solid income, the process will be the same for residential real estate. Commercial mortgages are taking significantly longer than usual as lenders are being impacted by the introduction of government initiatives. At this time, when people are purchasing they have to be more patient and sellers have to be more open minded.

We always recommend using an independent mortgage brokers because they work for you, which is unlike the banks. The banks can still offer a strong rate, but it may not be the most beneficial to you and they’ll only find the best rate at their own institution. Independent brokers have connections and the precise expertise to help people in their unique circumstance. Shopping around is not favourable as multiple inquiries for rates can have a negative influence on your credit score.

This is probably the busiest time in history for private lending, so many people are going to want financing to get back to their normal in their investments. Private money is recession proof which makes it so appealing, now is a positive time to invest in mortgages. Unfortunately, for those borrowing there is more demand than supply, and interests rates will be increasing for borrowing.

For residential properties, lenders will view your income when you apply for your mortgage by determining if your layoff is permanent or just for the duration of COVID-19. As for commercial mortgages, your personal income doesn’t really matter as the property will service the debt. Now is a positive time to utilize these opportunities, but only if you are financially comfortable. Utilize government incentives and work with your landlord if you are struggling. Don’t be afraid to reach out to people if necessary.

Most people can still pay their mortgage during this pandemic. Optimism is still high for the majority of those who own real estate right now, which is appropriate given the numbers. Private lending is more or less the same in activity right now, but there are more opportunities. Our prediction for mortgage terms in the next 6 months to a year is that they are going to stay low to keep the market as stable as possible.