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Once you find the right home, you'll need to act quickly. And while it doesn't guarantee your mortgage application will be accepted, getting pre-approved is smart for these reasons:

  1. You can make a quick, confident offer on your perfect home
  2. Get the home you can afford, knowing exactly how much you can borrow and what your mortgage payments will be
  3. You can protect yourself from rising interest rates with a fixed interest rate mortgage. The rate's guaranteed for 130 days.
  4. Set your budget knowing that termamortization, and mortgage payments are locked in at the time of approval

Five pro tips for buying a home in winter 2020/2021

Should you buy a house this winter? If you’re a qualified buyer, definitely consider it. Canadians will be spending more time at home in Winter 2020/2021 – living, working, studying, playing, working out, and so on. Why wait until spring to look for the comfort and security of a home that meets your needs?

We spoke to two housing pros to get advice about the winter real estate market:  Sue Gilmour, a sales representative with RE/Max, and Jordell James, sales manager and Mortgage Strategist with 8Twelve Mortgage.

Here are Gilmour and James’s top five tips for buying a home in winter 2020/2021.

1: Understand that THIS winter is different

Even before the COVID-19 pandemic, Canada’s real estate market faced upward pricing pressure as a result of growing demand and low supply.

When the pandemic hit, the early spring real estate market (typically the busiest time of the year) slowed to a trickle as the country locked down for public safety. But once restrictions were lifted in summer, sales boomed – and in many parts of Canada, the momentum has barely slowed.

“The conditions of the typical spring, summer, fall and winter markets are out the window now. Home prices are up, demand remains high and supply remains low and I’ve been seeing up to 30 offers on a house,” explains Gilmour, who specializes in the Greater Toronto Area and Ontario cottage country real estate markets.

Gilmour’s advice: whether you’re a qualified first-time buyer or a homeowner looking to move up, now’s the time to strike. Gilmour expects demand for single-family detached homes to grow through 2021 and 2022 irrespective of COVID, and for prices to rise accordingly.

So, while buyers may not snag any incredible “winter bargains,” they’ll probably find lower prices compared to now versus spring and summer 2021.

2: Get pre-approved or pre-qualified first

Unlike the sleepy winter real estate market of years past, winter 2020/2021 is about acting fast, says James. The 8Twelve Mortgage Strategist recommends lining up your financing before you do anything else.

“Get your mortgage sorted first – that’s a good piece of universal advice for any time of year. Get pre-qualified or pre-approved to buy so you know what amount you are approved for,” says James.

Knowing how much of a mortgage you qualify for lets you focus your house hunt, and assures sellers and Realtors you are in the market to buy, not window shop.

3: Be aware of holiday delays

While real estate and mortgage companies are more agile and digitally oriented than ever, be aware that bottlenecks down the line can slow the financing process.

“There were a lot of changes to the mortgage market due to COVID-19 and a lot of things can be done virtually. Even with clients who are not tech savvy and don’t use the Internet a lot, we have ways to get their bank statement, tax documents and so on, so at 8Twelve, there’s no need for paperwork,” or to schedule in-person meetings, explains James.

Nonetheless, the holidays are still the holidays, so expect delays. “December 21 through January 4 can be frustrating. The banks aren’t answering and people are away on vacation,” says James, advising homeowners and buyers to lock in their financing well before that window, or simply wait until afterwards.

4: Talk to a broker to get the best deal

If you’re selling your home to buy a new one, chances are you’ve got an existing mortgage. Should you pay it off from the proceeds of your sale and then get a new, hopefully lower interest mortgage for your new home? Or should you port the existing mortgage to your new home?

“It depends on the pain factor: What’s the penalty to break the existing mortgage and what’s the interest rate, versus what would be the new interest rate if I broke out? Let’s say I’m paying 2.24% interest instead of a possible 2.04%. But .2% on average is less than a $20,000 pre-payment penalty, so in this case, with the high penalty, it would be better to port and finish out the term. But if the prepayment penalty is small, and let’s say I’m paying 2.89%, then it would make sense to pay it off and get a new mortgage for the new property at 1.99%,” says James.

Bottom line: read the fine print of your mortgage and tap into the knowledge of a professional mortgage broker. They’ll help you determine what option will cost the least to you since they work for you (not the banks!).

5: Do your homework – all of it.

Time is of the essence when buying a house this season. Lay the groundwork to act fast in the event you find a home you like.

Gilmour, the sales representative says the groundwork says it is crucial to be ready to go, once you start house hunting. “Get pre-qualified. Get a good mortgage broker like 8Twelve Mortgage. Set up your real estate support system, with a Realtor, home inspector, your lawyer, your broker,” she explains.

Once that’s set up, start your search. “Look at homes virtually first on MLS or Realtor sites, then do a drive-by to see what the street looks like – the neighbourhood, the topography, the home’s exterior – and then the final step would be if you’re still interested, meeting your agent and wearing a mask to look inside,” she explains.

Winter may not be the traditional time to buy a house, but if you’re ready and qualified, there’s no time like the present.