Page 11 - ROSEDALE Lifestyle Magazine December 2022

CHANGES IN HOME EQUITY
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for a segment of homeowners, including new owners who purchased real estate at the peak of the market and are witnessing their neighbours’ homes selling months after their purchase for hundreds of thousands of dollars less than they paid for them.
Similarly, homeowners who have never relied on real estate value increases as a method of supplementing income or servicing existing mortgages are now facing carrying cost increases on certain mortgage products and renewal interest rate increases, all while simultaneously battling an increase in the overall cost of living. In summary, the run-up in real estate values created a false sense of reality and security for a segment of homeowners.
To make matters more challenging, most non-bank private lenders that ordinarily provide alternative financing options to homeowners who are unable to qualify for institutional financing for one or more reasons have adjusted how they underwrite, condition and approve their mortgages.
In other words, the private lenders that would ordinarily be stepping up to bat to fill the void and provide bailout funding to homeowners in need are not as willing to do so. is presents a Catch-22. While private mortgage lenders are rightfully prioritizing their duty to safeguard their investors’ capital, the homeowner, in need of private financing, no longer has this option, or at least not to the same extent as during a rising and more predictable real estate market.
In my view, it is evident that a recalibration is occurring before our eyes that appears to mark the end of the line for a segment of existing homeowners unable to sustain homeownership without year-over-year real estate inflation and a transition of the prime borrowers of yesterday to the non-prime borrowers of today.
In summary, it is my opinion that being cognizant of evident realities is simply a sound approach for industry professionals and consumers alike to navigate the current real estate terrain.
WINSTON CHURCHILL
ROSEDALE Lifestyle DECEMBER 2022 11