Being Creative in a rising Interest-Rate market
Being Creative in a rising Interest-Rate market
Louise Mason, Mortgage Broker, AB & BC
I met an industry partner for coffee downtown Calgary yesterday and he asked me 'How do you respond (on the mortgage side) in an increasing rate environment?'.
I loved this question. The approach we take in times like these define us as professionals. The true test of our character and resilience in our businesses is how we respond to times like these when rates are rising, the market is cooling off, and tension and anxiety around the future is high.
Back when I first started in this industry, my mentor told me something that I've never forgotten...
'This work Louise, it's 95% mindset, and 5% mortgages'.
What she meant with this, is how we think about times like these, determines whether we are going to thrive... or dive.
I am a natural optimist and our current market provides wonderful opportunities to be creative and problem solve! Even with the current market the way it is, there are usually options for most of our clients, it just might not look exactly as they thought.
Firstly, it's harder for home-buyers to qualify on the prime side in today's market because we have to stress-test buyers at an unusually high benchmark rate. However there are many great alternative and private lending options that we can explore when buyers are not able to qualify in the prime lending space. Alternative lending is truly a life-saving option that has allowed many of my clients who didn't qualify with prime lenders and banks to achieve their dreams of homeownership.
Alternative lenders are like the more laid-back relaxed cousin to prime lenders"
They can stretch your debt service ratios, qualify you without benchmarks and stress-tests, and they can take on clients with bruised credit. Alternative lending has allowed me to approve a self-employed client who had only been in his business for 2 months. A divorced dad who had a bankruptcy on his credit report. A single-mom to 3 kids who worked part-time. A busy entrepreneur who had not claimed their income on their taxes (oops!), and a retired couple earning only a government pension. These are people who never thought the would qualify and here they are enjoying their lovely new homes and building equity and wealth through real estate.
In uncertain times, we need to be creative and think outside the box.
And remember 'what goes up, must come down', real estate ebbs and flows constantly, things will return to normal because they always do.
I will leave you with one of my favourite quotes '“If opportunity doesn't knock, build a door.”
Enjoy the weekend, everyone!
Louise Mason
October 21st - Current Interest Rates:
4.89% - 3 year Fixed-Rate, Insured, 25 years (Alterna Savings)
4.99% - 2 year Fixed-Rate, Insured, 25 years (Community Savings)
5.04% - 2 year Fixed-Rate, Insured, 25 years (Radius Financial)
4.99% - 1 year Fixed-Rate, Insured, 25 years (Radius Financial)
4.99% - 5 year Fixed-Rate, Insured, 25 years (People's Bank)
5.79% - 7 year Fixed-Rate, Insured, 25 years (CMLS)
5.54% - 5 year Fixed-Rate, Uninsured, 30 years (Radius Financial)
4.40% - 5 year Variable-Rate, Uninsured, 30 years (Radius Financial)
4.40% - 5 year Variable-Rate, Insured, 25 years (People's Bank)
4.45% - 5 year Variable-Rate, Insured, 25 years (Radius Financial)
4.35% - 3 year Variable-Rate, Insured, 25 years (Radius Financial)
Alternative products:
5.84% - 1 year Fixed-Rate - Bruised Credit mortgage, credit scores between 500- 650 (People's Bank, non-confirming)
5.64% - 1 year Fixed-Rate - New Business mortgage, less than 2 years self-employed (Wealth One Bank, stated income)
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