Should you enter the housing market this summer?

If you want to enter the housing market this summer, there are some items to take into consideration. The current market conditions, plus your individual buying needs, will influence how you go about commencing your housing hunt. Here are some things you should do to help you determine if this summer is a good time for you to buy a home!

Summer market expectations

The Bank of Canada’s recent interest rate hike has brought the overnight rate up to 4.75 per cent. While this might impact the housing market further down the line, buying a home this summer will likely involve some competition with other buyers, as well as dealing with higher mortgage rates. However, the market is not as intense as previous years, so many buyers will still be able to find the right home within their budget if they plan accordingly.

Clarify your buying budget

Before you decide to enter the housing market, you should decide what your budget will be. Your buying power determines how much you can afford to spend on a home, and this is a critical number to know. Your budget will guide you throughout the entire buying process as it will help you find homes within your price range and avoid becoming house poor. Many buyers who do not calculate their budget ahead of time end up dealing with overwhelming mortgage debt, or do not get approved for a mortgage at all. In order to have a successful experience this summer, you need to know what your maximum budget is. 

Deciding on a budget can be tricky, because everyone’s finances are different. However, there are some common factors everybody has to consider. For example, you should evaluate your income and expenses, and how much you earn once you pay off your debts. You also need to consider how much you have stored away in savings, and how big you want your down payment to be. Finally, think about any other future expenses that might interfere with your buying plans. If you’re planning to purchase a new car or take a big vacation, this will likely push your timeline for buying back unless you want to rearrange your plans.

Get in touch with professionals early

The spring and summer markets are often busy times for real estate. This means realtors, mortgage brokers, lawyers, and lenders are often busy too! If you think you want to purchase a home this season, it’s a good idea to get in touch with these professionals fairly early in the process. You should start researching different real estate agents to find one who might suit your needs best. Ideally, you will work with an agent who knows your area well and has experience with first-time home buyers, if this is your first time purchasing. It might take a bit of time to find the right match, so consider getting started now! You should also reach out to a broker (like us!) soon to start the process of getting your pre-approval and learning which type of lender might work best for you. 

Be sure to get pre-approved!

As we just mentioned, you should get a pre-approval before you try to purchase a home. This is true year-round, but it’s especially important during the busier market months. A pre-approval means a lender evaluates your financial situation and provides you with an estimate of your potential buying power in the market. This lets you know what you can afford, and what improvements you may need to make. While it doesn’t guarantee you will secure mortgage financing from that particular lender, it helps you understand where you stand in the market, and what you may be able to achieve as long as you maintain your current finances. 

A pre-approval helps you get ahead in the market because it means that lenders already have access to your information. If you decide to use that same lender, the approval process can move a bit quicker. This will give you a boost in a busy market!

Have a clear vision before diving in

Finally, it’s important to know what you’re looking for before you enter the housing market this summer. If you don’t have a clear vision and plan, you might feel like you’re looking around aimlessly for an unknown goal. This certainly won’t help you find the right home in a busy market! It’s a good idea to know what your budget and home requirements are ahead of time. This includes the location and property type you’re looking for, and any other features you need your home to have. If you know all of that, you will be able to quickly determine if a home has potential for you or not. Prepare as much as you can so you can be efficient once you start house hunting!

Entering the housing market this summer will likely be a busy experience, but one that can go smoothly with the right preparation. Be sure to start thinking about your buying goals and reaching out to mortgage professionals. If you have any questions about your mortgage, give us a call at Centum Home Lenders! You can reach us at 506-854-6847, or get in touch with us here.