January 8th, 2024
There are various alternative options available for homeowners in an unstable market which is a high rate environment. Homeowners can use this time to assess their personal financial situation and tailor theirs next steps on what is right for them.
Here are some general considerations and options:
REFINANCING
Explore refinancing an existing mortgage. Talk to an experienced mortgage broker, regardless of the rate environment, you may benefit from moving. Talking to an investment advisor as well can be useful to help understand the way you can optimize your investment options based on your financial circumstances.
HOME EQUITY OPTIONS
You may have a relative that requires a little support financially. Tapping into your equity enables you to support. Before making this decision, think carefully but also make sure there are terms to this deal. Do not ever take this step with out the help of a Real Estate Lawyer to keep all parties above board and ensure the terms are right and fair for you
SELL OR DOWNSIZE
Depending on the market conditions and personal circumstances, homeowners may choose to sell their current home and downsize to a more affordable property. This is good for those looking to reduce major costs, live a more flexible life and are not tied to their existing ecosystem, which enables them to move away and just live life with more money vs being held as equity in their home
RENTING OUT THEIR PRIMARY HOME – FOR THOSE STRUGGLING TO KEEP UP WITH MORTGAGE PAYMENTS
Recently, many homeowners are struggling to keep up with their mortgage payments, having secured a home during 2019 – 2022 on a low variable that has increased dramatically. Rather than losing the property, there is an ability to move into a rental for the short term and rent the primary home to have the mortgage paid down and live within your financial means.
Before taking this step, sit down with a Mortgage Broker, Realtor, and Real Estate lawyer and assess the options on what is viable.
RENTING OUT A PORTION OF THE PROPERTY
Earn extra space by considering renting out a room or a portion of their property to generate additional income.
LOAN MODIFICATION
For those facing financial difficulties, contacting their mortgage lender to explore loan modification options could be beneficial. Lenders may offer temporary relief or modify the terms of the loan.
INVESTING IN HOME IMPROVEMENTS
Making strategic home improvements may increase the property’s value, potentially providing more financial flexibility.
MONITORING MARKET TRENDS
Staying informed about local real estate market trends and economic indicators can help homeowners make informed decisions about when to buy, sell, or refinance.
Get in contact with real estate lawyers who can keep you updated on the market trends
SAVING AND INVESTING
Homeowners can focus on building a savings buffer and exploring other investment opportunities to strengthen their overall financial position.
It’s essential for homeowners to assess their unique circumstances, consult with financial professionals if needed as well as real estate lawyers, and carefully weigh the pros and cons of each option.
Vanessa Mistry was called to the Bar of Ontario in 2019, she had attended the University of Sheffield in the United Kingdom where she received a Bachelor of Law (honours) degree. Following the completion of her degree, Vanessa obtained her National Committee on Accreditation Qualifications prior to transitioning to Toronto, Canada.
