Low interest rates tend to have Canadians act irrationally in the housing market, which leads them to take on too much personal debt, leading them down the path of economic difficulties.
As a buyer, you might find yourself facing multiple offers being made on the home you have fallen in love with, which can negatively affect you if you have to pay thousands more for the home of your dreams.
By not thinking rationally, and diving head first into the purchase, you might find yourself regretting your decision later down the road.
We might have low interest rates for now, and yes, the Bank of Canada has issued that they will keep the historically low interest rate until the middle of 2010.
When you do find the “perfect” house, take time and consider how much you really want this house.
Ask yourself questions that pertain to it. Here are a couple suggestions: can afford going above and beyond the price range? Is the house is worth paying that much for? Is it the right fit for your family?
Most of the time, you will find real estate agents listing a home slightly lower to attract the most buyers, in the attempt to start a bidding war.
In today’s market, a bidding war is not uncommon, therefore set aside an exact amount of how much more you can put into purchasing a home.
If you do find yourself reaching the limit of your purchase, consider backing out of the deal and finding a new home. There isn’t any point in you putting your family in a financial strain.
You might think that, “My mortgage rate will not change until 5 years from now”, and because of that you can afford to make the payments and purchase the house you want.
Remember that when rates go up, they will be reaching normal levels, which includes pre-recession levels.
When you are buying a house, always ask yourself whether it is worth the price and if you are willing to pay a bit more for it, in the event you find yourself in a bidding war.
Sarah Bryant is a Sales Representative with Royal LePage/Johnston & Daniel Division. Sarah is a regular contributor to the Toronto’s Muddy York Real Estate Blog. Sarah’s website is located www.sarahbryant.ca.
