Most homeowners have been able to cope with higher monthly expenses but the duration of the increased rates is taking a toll and some are struggling to make ongoing payments
As financial pressures intensify, real estate industry professionals are keeping a wary eye on debt-burdened homeowners – particularly those who rely on cash from private lenders.
“They just grabbed on to whatever they could get. They are in a world of hurt,” Mr. Morris says of those who bought near the peak. Many who bought with a typical 20-per-cent down payment and a mortgage for the other 80 per cent have seen the value of their property slide more than 30 per cent, which puts the mortgage underwater Mr. Morris points out.
“Now, if they want to renew, they can’t. Even if they can, the rates are atrocious,” he says, citing a recent example of 13 per cent interest plus another 2 per cent in fees. “Your only hope is that values go up,” Mr. Morris argued in successfully negotiating on behalf of the owner for more time.Another snag at the moment is that so many sellers decided to lease their house or condo unit when it failed to sell, the rental market is becoming saturated.Andre Kutyan, broker with Harvey Kalles Real Estate Ltd.
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