Should I Purchase my first home now?
Many people are debating whether they want to buy a property now or whether they should wait. They are getting mixed messages from the media about the market conditions and the state of the economy. Reports are indicating that the real estate prices in the GTA are once again forecasted to rise another 2.5% - 3.5% in 2012 and interest rates are said to remain at record lows through to end of 2013. AS OF JANUARY 16, 2012 the banks have announced in fact that they are now offering 5 year fixed rate terms with interest rates that are LOWER THAN EVER RECORDED. Go back and read that again! Lower fixed rates than ever recorded.
HOW WILL THAT EFFECT YOU? Well it means two things. (1) You will now qualify to borrow more "fixed term" money than yesterday by a long shot! Thus allowing you to feel secure in what you are commited to for a number of years (unlike a variable rate). It also means (in my opinion) that home prices in the entire GTA will continue to rise. That is a guarantee as of this mornings news re" rate reductions.
So is now a good time to buy? Maybe YES and Maybe No
House prices are cyclical.
In the market we are in right now (Early 2012) it is critically important to consider how long you will be in the home that you are about to purchase.
A few scenarios.
FIRST TIME BUYER? You are the buyer that is most effected when buying at the top or close to the top of a market. Real Estate values historically ALWAYS RISE. Over the long term. HOWEVER, if a first time buyer has the type of employment that is questionable in terms of security, or is the type of carreer that may see you getting transfered out of the country, say withing a three (3) year period, then my professional advise would be NOT to buy now. IF however you are reasonably secure and feel that you would likely stay in the home for a period of five years or more, then I would suggest it is an OK time to buy. Take out a five year mortage and be secure in knowing what your payment are over the next time frame. ALSO ..... REACH a bit in terms of price point. Mortgage rates are at historical lows. Take advantage! You WILL likely be making more money soon so don't go too low in terms of price point. And AS ALWAYS ... BUY LOCATION FIRST NOT the home.
MOVE UP BUYER (or Move Down Buyer)? Have no fear!!! You have likely seen tremendous equity gain in your home in the last few years. If you are moving up, you may be shocked at what you have to pay but you will likely also be surprised to find out that your present home is worth a great deal more than you thought. The Greater Toronto market in the $350k to $450k price point is scorching hot!! You will be trading paper money as you move up or down. Either way, you will have gained a great deal in new Equity Value. Congrats!!
Happy to speak confidentially with you any time.
Just put the coffee on and call me directly
Fred Drewry (416) 948-8532 torontohomes@rogers.com
