Real Estate News – Mortgage Deferral Program and the New Real Estate Norm

Every Tuesday, Melody Wilson, Edmonton Remax Elite Realtor goes LIVE across all social media platforms.

This week she chats “update on the Edmonton real estate market, the mortgage deferral program, real estate prices, and the new real estate norm”

Watch below, or read on…
Happy Tuesday everyone! I just have a few minutes to talk to you about what’s going on with the real estate market. I wanted to chat about what’s actually happening. There are a lot of questions. Of course there’s so much uncertainty everywhere right now, globally, not just locally or provincially. One of the things right now that’s big is the mortgage deferral program. Lots of people called in last week when it was first announced, and I think there’s been a huge misunderstanding for a lot of people. This program is made for people who are under financial duress.

There are a lot of people impacted financially because they’ve either lost their jobs or their job has been slashed in terms of the hours and the amount of income that they’re able to make.

This is not a program for people who are still making money and are able to just work from home or they’re physically no longer working at the office. That’s not who it’s for. It’s for people who are in a position where they don’t realize where their income is going to come from now, and they have a mortgage payment coming up around the corner. Another thing I’ve heard a lot about is – is this going to impact my credit score? You really want to talk to your mortgage broker, and of course, the lenders, they will tell you all that stuff. From what I’ve heard, it does not impact your credit score. However, that being said, if you’re not qualified for the program and you just stop paying your mortgage, then it’s going to impact your credit score.

You don’t get the mortgage deferral program by just not paying, it is not an automatic for all Canadians, you do need to call your specific institution to ask if you’re qualified, and then if you are qualified, then they’ll explain the details of how the program works.

Keep in mind that you are paying more interest and it’s gonna be over six month period longer, if you’re doing a six month. I’ve heard some people doing a three month deferral program. You will pay more interest and you will pay more for your mortgage. That’s just the reality of it. But basically they’re doing this to help people be able to afford living during our uncertain times, and during all this financial question marked period time, right? Don’t forget, it’s not an automatic thing, because if you don’t pay your mortgage because you think every Canadian gets a mortgage deferral program, of course it will impact your credit score. So make sure you take a look as different banks have different rules. Rental properties are different than primary resident properties, so that’s something to consider as well. Another interesting thing that has happened is the mortgage rates just went up. In the last month, the Bank of Canada lowered the rates twice and the first time they lowered the interest rates, the interest rates of the mortgages went down. And then, shortly after the second decrease of Bank of Canada’s rate drop, the interest rates went up. Then we just had the interest rates go up again yesterday at midnight. The rhyme or reason, one can only speculate because of all the people that are going to be doing this mortgage deferral, the banks are still trying to figure out, they still need to make money, because the economy needs to run. We’re trying not to have the economy completely crash. Globally everyone is being affected, and so they’re trying to figure out what to do. If you have questions about that, you can comment here and I can try to answer if I can. I can definitely connect you with some mortgage brokers that can kind of go through your situation, maybe work through some numbers with you to see if that makes sense to do that program or if there’s another option for you that might work better in your favor. I know that the mortgage’s also have been impacted by what’s going on because, as we are waiting for buyers to get approved for mortgages, the time is taking a bit longer. There’s a huge backlog of just enquiries on that program. Plus, then banks are being more specific and more, I mean, we’ve recession for the last 4 to 5 years, we’ve been already been under some strict guidelines, but they’re implementing even more stricter guidelines because they don’t want you to get a mortgage and then have to default or do a deferral program. I heard yesterday on one of the properties that the appraisal institute doesn’t want appraisers to go into properties if they don’t have to, so that’s going to impact the real estate market – it is impacting the real estate market. Day by day we keep getting different information and of course, can we continue to operate? Are we an essential service? Right now we’re not in complete lock down, so we’re able to still do things. However, all real estate agents have been highly advised that open houses should no longer happen. The only open house that are gonna be happening are virtual. I am looking forward to doing virtual showings of some properties here in the next couple weeks so that we can have a look at some properties together. But we’re not gonna be doing open houses for probably about a long foreseeable future. In regards to showings, those are still happening at a distance and limited, so that’s still happening. We had listings go up last week and the listing went for full list price and all of those things are still happening. But at the same time, there’s a lot of uncertainty, so a few weeks ago when this all first happened, we had clients who had to put their purchase on hold, which is completely understandable. We have sellers that want to hold because of all the different changes. But there’s other people that still need to move and sell because they’re part of an essential service and work is making the move or whatever the case may be. There is still that stuff happening, so definitely a huge question mark in terms of uncertainty. I know that it’s changed our spring market cause spring edmonton real estate market is typically a lot busier. We were ramping up to be busier, and of course, things have slowed down quite a bit. It will be impacted if there’s anything from the government to limit the ability to continue to do what we’re doing.

We’re already operating on a limited basis, but if it gets even more limited, we’re almost to nothing then of course, it’s going to impact the real estate market.

In terms of real estate prices right now, we continue to look at tracing based on the last 90 days. But again with the slower market we’ve had last 4 to 5 years, i’ve always looked at not just last ninety days, but six months, and the year, and then done some adjustments because it’s just been a big question mark for us here in alberta for a long time. So now we just added another variable in another unknown. So if you have any questions, I hope this blog was somewhat helpful. And if you want to make a call to the mortgage brokers, just send me a message. I’ll connect you with them. You will have to eventually talk to someone at a call center to get everything figured out unless you’re part of a credit union, because I know they’ll just talk to you directly and help you out.When it comes to the bigger banks, you’re gonna have to talk to them.

I hope you have a great day. Stay safe and stay home, and we’ll talk to guys next week.

Want to get in touch with Melody Wilson? You can reach her at or 780-945-7821

Blog Categories

Post Information

Similar posts you might like: