Last June’s floods left far more than a physical mess for homeowners and buyers to deal with. The financial aftermath remains unsettled still. For those currently involved in any real estate process such as obtaining or refinancing a mortgage involving a property in a flood fringe or zone, be forewarned. Lenders and insurers are being very cautious.
Uncertainty in the Calgary and High River mortgage market is a likely predicted side effect of the unprecedented flooding. The overall strength of the economy in Alberta, however, appears to be easily dealing with any symptoms before they really appear.
Clarify your mortgage options if dealing with a property in a flood zone with an experienced mortgage broker such as Mortgages By Candice.
Understanding the Process
Buying a home might have never been simple, but with a little guidance it’s not particularly hard to understand. At Mortgages By Candice we offer 10 Steps To Becoming A Homeowner in assistance for new homebuyers walking the road to ownership.
After the flood, the steps to obtaining a Calgary or High River mortgage remain the same, but there is new significance to having a property appraised – particularly in flood zones. For those seeking to buy, renew, or refinance in flood damaged areas, banks and mortgage insurers are taking a closer look at properties, and this has significantly slowed down the process for those people.
New Market Values
Many banks have sent mortgage brokers a list of postal codes for locations where they are now requiring additional appraisals before they will approve any financing for new mortgages or renewals. The list of areas includes neighbourhoods in High River and Calgary that were hit the hardest by the June floods. Additionally, insurers are also being cautious, requiring fresh inspections to determine if a home was affected by flooding.
Appraisals are based on estimates of current market value, but since the flood there has been very little activity in the market in flood zones. Even though most appraisers have the ability to research as far back as a year, when there has been a change as significant as that brought about by the flooding, banks prefer more up to date information.
Without a steady stream of sales, appraisers have a much more challenging task when it comes to determining a home’s current market value. To further complicate the task, with banks requesting hundreds of new appraisals prior to processing new mortgages or requests for refinancing, obtaining an appraisal for a flood damaged home in Calgary or High River is going to take more time than in the past.
The Road Ahead
While events of the last months have created uncertainty in the real estate market, as a mortgage broker experienced in the High River and Calgary markets, at Mortgages By Candice we believe there is still reason for optimism. Mortgage interest rates remain at near-historic lows. Government assistance for the areas hardest hit by flooding is on its way. And perhaps, most importantly for the current situation, many lenders are continuing to go through with real estate deals agreed upon before the flood. As these deals close, there will be new data available for appraisers to more easily determine current market values for new mortgages. This will help the market regain some sense of normalcy and begin to move forward.
What once seemed as simple as comparing the sizes of prices and homes in a given area is now being considered on an individual basis. With banks and insurers applying additional scrutiny to new mortgages, the role of the appraisal now has new significance. The process for obtaining a mortgage for a flood damaged home is essentially the same, however may take longer until the market stabilizes. Now, more than ever, the expert guidance of a mortgage broker with experience in the Calgary and High River area is essential. Contact Mortgages By Candice today.