This morning I read an interesting comment by an expert in the field of business…this person suggested that lenders may have an excess in mortgage funds to lend as of late due to a continually decreasing number of mortgage borrowers. The expert believes this may be part of the reason lenders are “price cutting” rates at the moment. Typically, the fixed rates are tied to the bond yield and change when there are fluctuations in that market but this expert makes an interesting argument aswell. Many first time Edmonton and Calgary buyers took the leap into home ownership in the first round of rate increases in the spring, as it was widely thought we’d never see rates as low as 3.79% on a 5 year term again in this lifetime. Thus, the wellspring of buyers has kind of run dry, some believe. Combined with the hesitation due to economic uncertainty of other potential buyers, say second and third time homebuyers, some lenders may be finding themselves with quite a bit of “inventory” still on their shelves as they head into the end of the third quarter.
Often, many people don’t think of their mortgage as a product they chose and purchased from the bank and that the bank has a certain quota of “mortgage sales” they need to make each year, just like every other retailer. Most of the time, the average person just feels lucky that they were even given a loan in the first place as apposed to a powerful “consumer” with the ability to reject, select and expect a certain level of product and service. With both demand AND rates decreasing, now more than ever, if you are in the market for a new home or a refinance, you are most definitely in the driver’s seat.
Be sure to shop the market before you sign any mortgage papers these days and to make things even easier, contact one of our Mortgage Brokers to do the rate comparisons for you. We have access to over 30 different lenders and it’s our job to find the best rate and the best lender to suit your situation.