Christine Buemann Mortgage Broker

There have been many changes in the mortgage world in the past 3 years, more specifically in the past 6-12 months. There are many changes to lender policies that have unfortunately moved qualified buyers to a position where they cannot qualify for a mortgage or perhaps have fewer options. There was a well written article in Canadian Mortgage Trends last week ( please take a moment to read it here ) and here are a few changes they have highlighted: ·     Some lenders now factor in a monthly payment for secured credit lines with  zero balance.    *this is by far creating the most issues ·     On revolving unsecured credit, monthly payments are being set at 3% of the outstanding balance . ·     Many lenders now calculate heating costs using a specific formula based on property size . ·     Conventional variable-rate mortgages and fixed terms less than 5 years are now qualified using the B...

The Bank of Canada announced new changes to come to Canadian mortgage guidelines this morning. This is the fourth tightening of guidelines in the past 4 years. They have clearly stated that the intention of their continual clamping down of qualifying criteria is an attempt to cool down the housing market and reduce household debt in Canada. I was pleased to hear that the 5% down payment rule would remain; however it is yet to be determined how these new rules will affect home owners. They will take effect on July 9th and I believe that they have implemented such a short time frame in order to eliminate the surge of people rushing into home purchases that was experienced with the last announcement of changes. Here are the new changes: • Maximum amortizations will be reduced from 30 years to 25 years • Maximum refinances will be reduced from 85% to 80% • Maximum GDS and TDS are set at 39% and 44% • Properties purchased at over $1 million will no longer be eligible for mortgage ins...

On March 19th, 2012, the Office of the Superintendent of Financial Institutions Canada (OSFI) published draft guide B-20 – Residential Mortgage Underwriting Practices and Procedures. They had asked for comments and suggestions from the industry and are now in the process of preparing final mortgage guidelines to be released in the near future. The following provides a brief description of OSFI’s decisions on a few key issues which will be reflected in the final guideline to Federally Regulated Financial Institutions (FRFI). Re-qualification at renewal: unlike what was originally suggested, it appears that clients will not have to re-qualify for their mortgage at renewal. Lenders have used repayment history as the main determining factor for qualification at renewal and it is anticipated that this will remain. Lenders will however be expected to “refresh the borrowers’ credit metrics periodically (not necessarily at renewal) so that [they] can effectively evaluate their credit risk. ...