Are Homes Still Closing? Here’s What You Need to Know
Many are concerned about whether or not homes are still closing, what a “virtual home” showing is, or how to stay afloat when it comes to managing finances during the COVID-19 pandemic. Here is Mark Faris, CEO & Broker, and Faris Team’s In-House Mortgage Broker, Tim L. Walker giving you an in-depth breakdown.
Q: Are closings still happening? And if so, what does the closing process look like today?
A: Yes, absolutely. Every link in the real estate transaction chain has been deemed an essential service. Purchases and refinances are closing. Most service providers, from lenders to lawyers, to real estate agents to mortgage brokers, are adapting to virtual processes. For myself, from application right through to funding, I can complete a mortgage transaction completely virtually using services like DocuSign. I can conduct virtual meetings through Zoom (like we’re doing on this very video). Lawyers are using similar technology to do virtual signings, and even appraisers are getting creative by looking through windows and having homeowners take interior photos for the appraisals. The process hasn’t changed that drastically – just a little more done sitting in front of a computer.
Q: What’s the better option right now, a fixed or variable rate?
A: Really, the answer to this question is more or less the same one I give every time someone asks me – it depends. Both fixed and variable rates are near historic lows. Variable rates offer more flexibility and lower penalties which means they usually win out over fixed rates. Also, all signs point to variable rates dropping even further soon. Fixed rates, however, offer a consistent payment over the term of the mortgage, and maintaining payment consistency, especially during a time like now, might help people keep a better grasp on their finances.
Q: Are rates going to go up?
A: Even though the Bank of Canada has dropped rates by 1% over the past few weeks, many lenders have begun to increase rates. This is mainly due to liquidity issues, as mortgage lenders are now facing the possibility of many clients deferring mortgage payments or even defaulting on the mortgages. While I anticipate rates to stay relatively low, I’m not sure I would expect rates overall to drop much further than they already have this year.
Not all mortgages are created equal so the best way to figure out which option is best for you is to allow a mortgage broker to assist you in choosing the right mortgage from the right lender for your specific circumstances.
Contact our in-house mortgage expert, Tim Walker at:
TIM L. WALKER | Mortgage Broker | M11000308
Anthem Mortgage Group | Brokerage #10294