As we all know, the United States have been clawing their way through a real estate crisis just as we’ve been experiencing here in Canada. However, unlike in the United States, Edmonton banks are once again offering mortgages, even though they are being extremely cautious this time round. Even though they are now scrutinizing both the properties and the borrowers, it’s still a good time to apply for a mortgage considering that the interest rates at present are extremely low. Furthermore, if rumors that the housing market has bottomed out are anything to go by, there has never been a better time to acquire a property for the lowest price and with the lowest mortgage interest rates.
Surprisingly enough, even though the government phased out 100% loans, providing you have a good credit history, you can still obtain 95% financing. What this means is; apart from attorney fees, you will only be required to make a down payment of 5%.
Government guaranteed mortgages are still out there too for Edmonton mortgages. A few of the rules have changed, but they are not deal breakers by any means. For instance, the maximum amortization period has changed slightly moving down from 40 years to 35 years. Government backed mortgages will now require that a 5% down payment needs to be paid now, and there is a minimum credit score requirement now.
Essentially, these measures have been taken in order to prevent Canadians from experiencing the same mess as is currently being seen by U.S. citizens. Irrespective of what is happening in the United States at the moment, the housing bubble in Canada has certainly not burst, especially in Edmonton where stringent mortgage lending procedures were followed in the past.
The CMHC (Canada Mortgage Housing Corporation) continues to offer mortgages with a variety of flexible tools and options. These range from single advance plans, to progressive advance plans, and even extended amortization periods. Furthermore, it may be worthwhile noting that these mortgages also offer portability for those who may wish to move at a later date. Additionally, those who choose to purchase an energy efficient home in Edmonton will also qualify for certain breaks.
Other good news circulating in the mortgage market is that as from June, 2009 residential starts actually saw an increase for the second consecutive month, whereas in the United States, residential housing starts are all but non-existent.
According to reports from the CMHC regarding senior housing, the vacancy rate for standard units in retirement rental homes has remained steady at 5.9% since the beginning of 2009. Additionally, the average rent for a retirement home unit remained steady at $2,334 per month. Of course, this is yet another first class comparison to what we can see happening in the United States.
We do however have one thing in common with our southern neighbors in that we also have access to hard money lenders in Edmonton. In fact, it is common knowledge that these lenders have been freeing up a considerable amount of cash in recent times and as a result, mortgages are now available but they come with a loan to value ratio of approximately 70/30 which of course is quite expensive, both in terms of interest and points. For this reason, unless you have been refused a mortgage by the banks, you would be well advised to avoid such private lenders altogether.
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