With rising home prices throughout much of the lower mainland of BC many people are looking at their situation and wondering what opportunities this gives them. For anyone who owns a home already, the appreciation in value in their home may give them the opportunity to upgrade to a bigger home. With prices increasing there is the opportunity to sell your home and get enough equity out to come up with a substantial down payment for a new purchase. In a declining market this is of course more difficult as it may be hard to sell your property for enough to pay off your mortgage, pay your real estate fees, and then come up with a down payment and closing costs for a new purchase.

The downside of upgrading to a bigger home in this market is of course that you are overpaying for your new home. However, you are also selling your home for more than ever as well. The reality is in any market that you sell and buy is that you can never time things solely to your own advantage. Everything is either up or down.

A major problem right now if you are going to sell is what will you buy? There is limited selection on the market and heavy competition for it. This means you need to go looking for properties with a preapproval in place and in many situations be prepared to bid more than asking. There is also the pressure to write offers without subjects. This of course can be fairly risky as no lender will give you a firm approval until after you have written an offer. Then, if you fail to obtain financing afterwards, you will forfeit your deposit and can be sued for failing to fulfill your contract.

One benefit to the rising market is that it will give people the chance to either pay off higher interest consumer debt or do renovations to their home. If you have credit cards that are charging you double digits in interest rates or consumer loans that cost 5% – 6% in interest a mortgage at 2.5% or less may make sense at this time. For refinancing your home the maximum equity you can take out is 80%. With the quick increase in market prices this will give people the opportunity to do this that previously couldn’t as they had borrowed more than 80% of the value of their property.

For more information on our mortgage products please visit our website at www.ymscanada.ca.