Over the past few years, Toronto home sellers were certain of a quick sale, even when the price of the average home reached $380,132. Sellers would often refuse routine home inspections and ignore buyers without a pre-approved mortgage in place, because bidding wars were commonplace. Most homes sold within 31 days.
Now that Toronto home sales have declined 14% in one year, and prices have declined 3%, sellers are more uncertain and willing to negotiate. Sanity prevails, as the price of the average Toronto home fell to $368,549, and sales take 36 days. Buyers realize the Toronto housing market is still overpriced by approximately 20% of its true value, but are willing to pay the premium for the convenience of a short commute.
A mortgage broker is the key to capitalizing on this Toronto buyers’ market. Lenders are scrutinizing every buyer carefully this week because the stock market downturn has made credit very tight. Applying to multiple banks adversely impacts your credit rating because each credit inquiry is recorded on your credit history. Equifax keeps all inquiries on the consumer’s credit history for three years. A mortgage broker protects your credit rating by making only a single inquiry and submitting the results to several lenders on your behalf.
TD Canada Trust raised its rates for variable mortgages and home equity loans today to 5.75%, which is 1% above prime. Other banks and credit unions are expected to follow suit.
Mortgage brokers are still able to obtain 5.5% interest on five-year fixed mortgages for their customers, and have greater clout than an individual buyer when negotiating amortization, portability, and repayment schedules.