28 September 2010
According to recent survey released by Toronto-Dominion Bank, 60% of repeat home buyers don’t know they have other options when it comes to their current mortgage.
“Today’s rates can become attractive in two years,” says TD Canada Trust regional sales manager.
The survey also found 33% of repeat buyers take their current mortgage with them to their new home and only 8% use it as a selling feature of the home they are leaving.
“The deal is that mortgage assumption means our new buyers have to qualify for the mortgage”, – says Ms. Haque. “That’s why today there are very few assumptions”.
“The main thing is that with lower rates, no one will pay 6% when they could get 4% somewhere else”.
Century 21 Canada chief executive, Don Lawby, has been in this business long enough to remember a time when your house’s price was rising if you had a low rate mortgage on it.
Another interesting product was the so-called vendor take mortgage. According to Canada Mortgage and Housing Corp. in this case the vendor lends you money, not a financial institution.
You loan someone money so they can buy your own house and make mortgage payments to you.
“It’s quite possible that we are going to see more and more of them in the future because of tighter mortgage regulations,”- says Mr. Lawby.
Generally, vendors offer lower rates, that’s why it’s necessary to be very careful in order not to overpay for cash upfront.
But sellers risk as well, because they do not know the buyer – it’s all very tricky.
And as for the vendors taking on mortgages to sell their homes, there’s always a certain problem – the majority of them need cash for a new home purchase.