Good news on mortgage insurance changes

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Recently I wrote a blog post regarding an announced change to CMHC’s mortgage qualification guidelines that were potentially damaging to the real estate market and to buyers looking to get into the real estate market.  It would have also resulted in higher rates for many homeowners looking to renew or refinance their mortgages.

In that email, I had mentioned that the effect of these policy changes would depend on what the other mortgage insurers would do.  At that time, I was not particularly optimistic that they would maintain the current policies, as the government has an influence on their policy decisions.  However, they have since confirmed that they will maintain the policies as they are.

As a result of these announcements, the negative effects of CMHC’s decisions have been largely mitigated, at least for the time being.  It is not inconceivable that the other insurers (Genworth and Canada Guaranty) could change their policies in the future.

The effect of these events will be that CMHC will largely become a minor player in the mortgage insurance space, and I expect that the market will continue to be largely unaffected by those changes from CMHC.  I do not know or foresee any other changes in how it will affect business at this time.

If you have any questions, please feel free to follow up with me.

New CMHC mortgage rule changes impact non-wealthy borrowers

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CMHC has announced new mortgage rule changes that will come into effect on July 1.  Here are the changes:

  1. They are discontinuing the “Flex-down” mortgage product. This program is not being used very often, but it now disqualifies you from using borrowed money (aka line of credit) to use as a down-payment to purchase a home.
  2. The minimum beacon score required to qualify for a mortgage with less than 20% down will increase from 600 to 680.
  3. The debt servicing ratios for borrowers to qualify for a mortgage will be changed.  The gross debt service ratio (GDS) will decrease from 39% to 35%, and the total debt service ratio (TDS) will decrease from 44% to 42%.
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CBC: Chartered bank charges $30,000 mortgage penalty to woman forced to sell home due to pandemic

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I was reading through the news yesterday when I came across this article about mortgage penalties that chartered banks are charging their mortgage clients to break their mortgage. This case was a TD mortgage. However, they also mentioned another example in the article that was a CIBC mortgage.

I have written about this and told my clients about it many times before. Have a look at my Mortgage broker vs bank article for more information about this and other issues that can cost you more money by working with a bank instead of a mortgage broker.

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How does the COVID-19 epidemic affect your mortgage

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With the COVID-19 pandemic reaching its second week of interrupting our regular daily lives, there have been increasing questions in the wake of business closures and layoffs about how mortgage companies will face the significant disruption to the lives home owners.

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COVID-19 update

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The news of the COVID-19 pandemic weighs heavily on all of us, from the public in general, to my mortgage clients, my brokers and to ourselves and our families.

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Good news regarding OSFI rule changes

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This is just a quick note to let viewers know that IF you are one of the people with 20% or more down-payment and are in a position that the new OSFI rule changes affect your pre-qualification, that I can extend the current guidelines into the new year by up to 120 days provided that I have an application and am able to get a pre-approval in place with a lender for you before January 1. (more…)

OSFI B20 mortgage guideline changes 2017 – Part 1

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B20?  Is that some kind of vitamin?

It certainly sounds like a vitamin, but unfortunately, it is something else altogether.  The Office of the Superintendent of Financial Institutions is the regulator for all federal mortgage lending institutions.  They set the regulations for mortgage companies like banks to follow (or ignore).

The latest updates to the B20 mortgage regulations could bring some potentially very disrupting changes to the real estate market, especially if you are wanting to get a mortgage in Vancouver, or you are a mortgage broker in Vancouver. In summary: (more…)

Cash in on your property values with a refinance!

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If you have followed my blog for a while, I think you would understand me saying that I find it difficult

mortgage refinance
By: Damian Morys

to come up with interesting original material to provide.  I mean…I am selling getting into the biggest DEBT that most people will ever likely incur, and I talk about a local housing market that appears out of control but actually is NOT.

The product I offer is intangible, and is the “nasty” part of a transaction that people otherwise enjoy.  No one goes out shopping to purchase that hot sexy mortgage, there is no Gucci or Prada branded mortgages I can put in the window that anyone will be interested in buying.  There’s an idea to justify a higher interest rate! “Yeah, I paid double what everyone else is paying, but it’s so worth it, the paper that I signed was so soft and smooth, and the quality of the printer was amazing!”

Anyways, rather than just write my grievances with the current situation, I tried to think differently.   (more…)

Watch out for the wolves!

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I was meeting with my business development manager for Canadian Home Income Plan (CHIP) about their reverse mortgage product today, and he shared with me an experience with a client of his bank that is at once shocking but also, unfortunately, not uncommon.

There is a private mortgage lender who advertises on the radio that did a mortgage for a client who was terminal with cancer.  The mortgage amount was $500,000.  Do you know how much the fees were?  $65,000!  That is insane!  CHIP was able to take care of him in a way that he could enjoy his remaining days with his family in comfort, and provided a much more fair solution, but that is not really the point of the story.  It is technically legal to charge those kinds of fees, but it does not make it fair, equitable or correct. (more…)