New Changes to Mortgage Qualification

General Victor Anasimiv 25 Oct

On October 17th, 2016, new federal mortgage rules came into effect. Here’s a brief rundown of the changes and how they might potentially affect your mortgage borrowing now or in the future.

Change # 1 – A new stress test is now required for all insured high-ratio mortgages (less than 20% down-payment) regardless of the term or whether is it a fixed or variable rate mortgage. You must now qualify at the Bank of Canada rate which today is 4.64 per cent.

Change # 2 – Restricted insurance for low ratio or conventional mortgages. This means that many lenders will require the above insured mortgage stress test even for a conventional mortgage. While the exact effects of this change are to be determined as each lender adapts, this could potentially limit the choices available for consumers and we may see increased interest rates for some products.

Change # 3 – New reporting requirements for the sale of primary residences to the CRA regarding the capital gains exemption. Everyone who sells a home will now be required to report the sale on their tax return. This move was made to prevent foreign buyers from selling a home in Canada without paying capital gains tax.

These changes and the effects they may have on your purchasing power are a good reminder of how important it is to have a mortgage broker on your side with your best interests in mind. Did you know that you can only access many of the largest mortgage lenders in Canada by working with a mortgage broker? I work with Canada’s leading financial institutions including banks, trust companies, and credit unions. 

I also have lenders available that specialize in providing mortgages for clients who are self-employed, contract employees, have seasonal income, have trouble proving income, or lack some of the standard documentation.

I am an expert in finding the best mortgage for all Canadians, but understand that sometimes you may have challenges in your past that I can work through with you, to get you back on track. You deal with me directly through the entire process, from our very first conversation right until the mortgage process and funding is complete.

I am also there after funding to manage your mortgage ensuring that you are paying the lowest overall cost on your mortgage going forward.

If you have questions about how these new mortgage rules might affect you or about anything else, please give me a call at 250-338-3740 or email anasimiv@gmail.com

It’s About More Than Just a Good Rate

General Victor Anasimiv 25 Oct

When you decide that it’s time to start looking for a mortgage, it’s hard not to be attracted to flashy ads from the banks when they have their low interest rates in big colourful bold print.  Act now!  Limited time offer!  Lowest rate ever! 

While low interest rates are good, especially on a purchase as big as a home, there’s more to this story.  Is shaving a couple hundredths of a percent off your rate worth any features you may be giving up, or the increased penalties you’ll face should you need to break your mortgage early?

Low rate mortgages usually come with no frills and prohibitive pre-payment penalties should you need to break your mortgage early.  While they may work for some people, they definitely won’t for everyone.   Did you know that almost 40% of mortgages are broken early for various reasons? What if you need a bigger house as your family grows or need to relocate due to work before your term is up?  Portability, or the ability to move your mortgage to your next home, isn’t always an option with these mortgages.

Most mortgages come with the option to pay off a percentage of your original mortgaged amount or increase the amount of your payments, without penalty.  These percentages may shrink with low-rate mortgages.

My intention isn’t to scare with you with these scenarios.  As I said, these low-rate products do work really well for some people.  But saving 0.05% on your interest rate on a $300,000 mortgage only translates to savings of $8/month.  Is that really worth the other perks you may be taking a pass on?  What I do want is for you to be informed and confident in the decision you’re making.  And that’s where I come in.  You should have a professional like me on your side who is knowledgeable about the various products, terms and rates available, and which one might be the best fit for you.  Give me a call, I’m here to help.

250-338-3740 / anasimiv@gmail.com