In collaboration with nesto
A real estate transaction is one of the biggest financial moves you'll ever make. The Canadian real estate market is in turmoil. With prices and mortgage rates rising all the time, it's hard to make an informed decision about buying or selling a property. Why not learn more about the best tips for a successful real estate transaction?
A webinar to tackle a fast-paced real estate market
To help our readers, Hardbacon hosted a webinar on June 29th in partnership with the mortgage brokerage firm nesto. During this event, Julien Brault, CEO of Hardbacon, and Serge Lessard, Director of Mortgage Development at nesto, gave advice on one of the most important transactions in a lifetime. Among the topics discussed were the choice between a variable or fixed rate and the best ways to determine what you can afford.
What is nesto?
nesto is a digital mortgage platform that offers a quick and easy financing experience. It offers a low rate up front, and its experts take no commission. Having already helped over 210,000 Canadians with their mortgage financing, it was only natural to tap into their expertise for a successful real estate transaction. Here are some of the key learnings highlighted during our webinar.
A variable rate is still more advantageous
Last month, the Bank of Canada raised its key interest rate by half a point to 1.5%. Given this, choosing a variable rate still remains the most mathematically advantageous option, according to Serge Lessard: “A half-point increase would represent about a hundred dollars over a year, or about ten dollars a month,” he explained.
Moreover, although the market is currently stabilizing and sales have slowed down in recent months, Serge Lessard does not expect prices to fall very sharply.
Beware of promotional offers before making a real estate transaction
If you've been shopping around for mortgage financing recently or thinking about a real estate transaction, you may have come across promotional offers that offer all sorts of benefits. Serge Lessard advises caution with these: “They are often marketing products designed to attract customers, but are not always appropriate for their situation.”
When looking for a mortgage product, take the time to look at the details, such as “accelerated mortgage repayments, penalties, portability component, legal fees, etc.” Pay particular attention to clauses that imply additional costs if you break your contract.
Making lucrative renovations
Are you considering renovations before selling your property? But it has to be worth it and add value to your home. You don't have to tear down all the walls and rebuild: certain types of work, such as renovating the kitchen or bathroom, or replacing windows, are wise investments to increase the value of your property.
Serge Lessard advises discussing your renovation projects with a mortgage lender. Among other things, you could aim for a line of credit that would allow you to make renovations that are attractive to future buyers.
The benefits of using a mortgage broker for a real estate transaction
When offering mortgage rates to their customers, banks will only offer you their own products. This is not the case with a mortgage broker, who is an independent player and can therefore present you with a wide selection of products and offer the best rates on the market. They save you time and money on a real estate transaction by doing the research for you.
A better credit rating, a better rate
The credit rating is an important factor in accessing a mortgage at an attractive price. Serge Lessard believes that with a score of 680 and above, files are easy to process. Below this number, access to a mortgage can be more difficult and, above all, you risk paying much more.