2008 Ends All Time Low

REAL ESTATE : 2008 ENDS AT AN ALL–TIME LOW by A. Dowler December 18 - 31 2008 The Bank of Canada has dropped their rates again. It is an early Christmas miracle. We should be dancing in the streets. The rates have not been this low since 1958 — a 50 year low. Hell, I am only 40; I have never seen such cheap rates. These low rates should get me running to the banks and take advantage of the cheap money. What is stopping me? The first thing stopping me is ‘credit score.’ You must have around 640 or higher as your credit score to qualify for any type of mortgage today, let alone a great rate. As a mortgage broker, I can qualify you for a five year term at 4.99 percent in a mortgage – today! But (and why is there always a ‘but’?) you have to have a 680 or greater credit score, secure job, years of tax returns and still we will have to wait a week for the bank to try to figure a way to back out of lending you the money. On the surface everything seems peachy keen, but banks are trying harder than ever to hold onto their money. The government is lowering the rates to spur lending but the banks and insurance companies are looking for any excuse not to lend. Oh, and did I mention the banks did not lower their rates the full drop? Some held back a little, and some a little more. So, the Bank of Canada is dropping rates to spur on the economy and the lenders are not really following the plan. The second problem in today’s economy is fear. People are only buying or selling if they have to. No one in today’s market is looking to move up into the bigger house. They can buy a larger home and reap the savings in the buyer’s market, get cheap money, and lock it into a five year term at a 50 year low. What is stopping them? Guilt? The holidays? Fear? Probably all three. Let’s see what the New Year brings. A new president (go Barack!) in the U.S, and a new prime minister (maybe?) in Canada could both provide a new outlook, spurring great rates and hopefully a refreshed economy. Over the next few weeks start thinking about a new investment, a new home, a new mortgage. People, we are at a 50 year low — money is cheap — so go get some. Happy Holidays. V [DARRIN DEROCHES] Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.