The real estate market came to a grinding halt when Coronavirus hit in early March, and though it’s slowly coming back to life, buying and selling a house looks a little different now. With CMHC mortgage qualification rules changing as of July 1st and a new protocol that’s helping minimize the COVID-19 risk, here’s what you need to know about buying and selling a house in a Coronavirus world.
Stringent physical distancing rules
House showings and viewings require a little extra work to protect yourself and others from coronavirus. Expect hand sanitizers and masks to be part of any home-buying experience. If you are selling, you can request to have prospective buyers sign a health disclosure prior to visiting your home. You can also expect to sign these prior to viewing homes. A minimum number of people may enter homes, so you may need to keep your mother-in-law and kids off of your open house viewing entourage for now.
Technology is your new best friend
Virtual home tours may continue to be the first showing. From 3D tours to virtual open houses, this ensures that only the most interested buyers will be looking at your home in person. If you’re buying, make sure you check out all the available online marketing materials possible, as photos, 3D tours, and video vignettes can do a lot to narrow down your in-person house visits. Google Maps can give you a better understanding of your new house’s location and nearby amenities, with useful satellite and street views that give homebuyers an accurate representation of its surroundings.
Open houses are not so open
Even with the market opening up, expect open houses to have scheduling, social distancing, and hygiene practices enforced such as mandatory masks, hand sanitizer, and gloves. Open houses must only be done if the seller is comfortable to do so, under the advice and along with the best practices of the realtor or real estate company that is representing the seller.
New mortgage requirements
Your borrowing power may be impacted by CMHC’s new mortgage requirements. Homebuyers will need a higher credit score, no borrowed down payment, less buying power, and reduced debt service ratios.
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Good news for Real Estate Buyers: Genworth and Canada Guaranty, the other mortgage insurers in Canada, will not be following CMHC’s update below. So it’s business as usual! What do the changes to CMHC’s Mortgage Requirements mean for our homebuyers? Effective July 1, the following changes will apply to new applications that may impact your borrowing power. Please share this important message with your friends and family: 👉Homebuyers will need a higher credit score. At least one borrower must have a minimum credit score of 680. 👉No borrowed down payment. Non-traditional sources of down payment like a line of credit or credit card cannot be used. 👉Less buying power for homeowners (13-9% reduction in the mortgage money you qualify for). Debt service ratios have been reduced. For example, a family with a $100,000 income that would typically qualify for a $500,000 condo purchase, now qualifies for only $443,000 maximum mortgage money. Contact us today to discuss what these new changes mean for your specific situation. If you need advice on your current mortgage, we are set up to help you online and on the phone, no need to meet in person. Now is a good time for an annual mortgage check-up. Give us a call to get started today. Your Passion. Your Home. Your Mortgage Broker. #stayinformed #mortgageadvice #mortgagebroker #financing #toronto #torontomortgagebrokers #mortgagebroker #torontomortgageagent #yourmortgageyourway
For custom advice of how the new mortgage requirements will affect your specific situation, or get an annual mortgage check-up, give me a call.
It’s always best to work with real estate and mortgage professionals to get the most up to date information as things are changing constantly. Your house is your most valuable asset and while real estate looks a little different than before the pandemic took hold, it’s still possible to successfully buy or sell a house in these times.