Mortgage Intelligence

Oshawa's Mortgage News Desk!


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Purchase or refinance now before rules change in January

If you’re looking to buy and will have more than 20 percent down, or if you are considering refinancing, then you might want to do so before January 1, 2018. Why? On October 17, the Office of the Superintendent of Financial Institutions (OSFI) released new guidelines for residential mortgage underwriting at all federally regulated financial institutions. Starting from January 1, 2018, a new ‘stress test’ will be applied to all new conventional mortgages – and not just those mortgages that require mortgage insurance (downpayment or equity of less than 20%).

The so-called “stress test” is designed to protect homeowners should interest rates rise. Lenders will be obligated to qualify all new conventional mortgages at the greater of the Bank of Canada’s five-year benchmark rate (currently 4.89%) or the contracted rate plus 2%. So if your contract rate is 3.29%, you will be qualified at 5.29%.

Here’s what that might mean for you:

You want to buy a home with more than 20% down. Your payments will always be based on your contract rate so this new rule isn’t costing you more. However, the new rule changes how much mortgage financing you would qualify for. If that’s the case, you may need to look at a less expensive home, save up for a larger downpayment, or reduce any other debt. Or we can take a look at a variable rate mortgage that lowers your qualifying rate (if the rate plus 2% is less than the benchmark 4.89%) and has the option to convert to a fixed mortgage.

You want to refinance to pay off debt or buy an investment property. Here too, your actual mortgage payment will not be affected.  But the new rule could slow you down by making it more difficult to qualify for your refinance. You may need to wait and accumulate more equity, or look at a lower-rate variable mortgage.  If that refinance is important to securing your own financial health, get in touch with the team at MiMortgage.ca ASAP.

Your mortgage comes up for renewal next year. This more stringent qualifying requirement will not apply to mortgage renewals. If you go shopping for a better deal with a new lender, however, that will require that you re-qualify… and the new rule will kick in for you too. It still is very important that we review your options together.

What can you afford?

New mortgage qualifying for purchases with 20% down

Household Income Purchasing Power Today Purchasing Power    Jan 1, 2018
$60,000 $409,626 $334,323
$100,000 $682,710 $557,206
$150,000 $1,024.065 $835,809
$200,000 $1,365,420 $1,114,411

For illustration purposes only. Based on 25 yr amortization, 20% down purchases, 5 yr term, qualifying rate 3.29% today and 5.29% January 2018. Does not include property taxes, heat or condo fees. OAC.

Get in touch now – you have the rest of 2017 to get in under the old rules. Going forward, we’re here to work with you early in the process to make sure you are fully prepared for your purchase or refinance. We also have access to non-federally regulated lenders that do not fall under this new guideline. We’re always here to answer your questions, so feel free to contact the experts at MiMortgage.ca at 1 866 452-1100 or by email any time!

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Ten great reasons to use a mortgage broker

For many Canadians, mortgage payments are their single biggest expense. Yet most don’t comparison shop to ensure they’re getting the best mortgage rate and terms available, which can cost tens of thousands of dollars over their mortgage years. Don’t make the same mistake! Here are 10 reasons why you need a mortgage broker working for you:

  1. Choice.  A wide range of lenders, including major banks, credit unions, and other national, regional and private lenders will instantly become accessible to you, ensuring that your specific needs are matched to the right mortgage.
  2. Great rates. Get money in your pocket by taking advantage of Mortgage Intelligence’s clout with lenders. Our stellar reputation and longstanding experience allows us to negotiate great rates and access limited time specials.
  3. A focused expert.  A mortgage is a very significant financial event. That’s why you want someone who is highly specialized in the mortgage marketplace and focused solely on your needs. You’ll get advice that will make a significant difference in your financial life.
  4. Independence & objectivity.  We work for you, not the lender.
  5. Solutions when you need them.  We can provide funding for bank turndowns, the self-employed, past credit problems, etc. There are mortgages for almost any situation and we know them all.
  6. Save time. Everything relating to your mortgage can be managed around your busy schedule.
  7. Service, service, service. We’ll be with you every step of the way, to answer all your questions, outline your best options, and efficiently guide you through the process.
  8. Ongoing support.  Our services don’t stop after the mortgage closes. We will stay in touch with you for the life of your mortgage with advice and opportunities.
  9. No cost (oac). The winning lender pays compensation for the services and solution provided, which means no fees for you in the vast majority of cases.
  10. Your satisfaction.  Our goal is to ensure that you are so completely satisfied with your mortgage experience that you will be happy to refer us to your friends, family and colleagues.

With all changes that have taken place in the last twelve months, and the anticipated changes that are due to be announced soon, a mortgage broker’s role has never been more important. To find out more about how the new rules might effect you, contact the team at MiMortgage.ca at 1 866 452-1100 to speak to an expert now.