Open House- The Real Estate & Mortgage Show: August 18, 2018
Rental markets and investment properties- this week on Open House: The Real Estate and Mortgage Show
There are fewer than 5,000 residential properties on the market, 5,930 including the condo market. The impact of the stress test is becoming apparent with people who have decided to stay put for the time being with the thought that they may not qualify for a new mortgage.
The stress test is also impacting the rental market in Ottawa. There are fewer properties available for rent and the prices are higher than they have been in the past. When looking to rent out a property a credit bureau report can be very indicative of job and housing movements of the applicants. When it comes to having a cash-flow neutral rental investment property, it may be beneficial to use the interest-only mortgage to ensure funds are available for repairs and to pay down your principal residence or higher interest rate debts.
Banks and lenders are becoming more stringent with their requirements for approval which means that they are adding an additional time frame in order to ensure all the conditions are met. Down payment documentation is highly reviewed and the lender can request any follow-up documentation they feel they need to in order to satisfy the anti-money laundering outline. Adding an appraisal condition is at the discretion of the lender and the mortgage insurer.