Mortgage Intelligence

Oshawa's Mortgage News Desk!


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Should you stress about the stress test? What you should know about new mortgage rules.

mi_stresstest

On October 3rd, Finance Minister Bill Morneau announced that new mortgage rules will include more stringent “stress testing” for borrowers.  The new rules are designed to lower debt levels, enforce some belt-tightening, and protect the housing market over the long term. Here’s how these new rules will affect Canadians.

The High-Ratio Rule (for buyers with less than 20% downpayment)
There has been a long-time rule that you must have “high-ratio mortgage insurance” if you have less than 20% downpayment.  This insurance is there to protect the lender, and the premium is almost always added to your mortgage amount.

  • What’s changed? If you require an insured mortgage, you must qualify for your mortgage using the Bank of Canada qualifying rate (currently 4.64%) regardless of what your actual mortgage rate will be.

That means that – although I can find you a much better mortgage rate – you’d still need to show you can handle the mortgage using the qualifying rate. This financial “stress test” was already applicable for fixed and variable mortgages with terms of 1 to 4 years.  Now, it also applies to fixed-rate mortgages of 5 years or longer.

  • Why the new rule? The government wants to be sure that borrowers can withstand any increases in mortgage rates when their mortgages come up for renewal.
  • Will my payments be higher? Your payments will still be based on your much lower actual mortgage contract rate. Keep in mind that mortgage rates are expected to stay at record lows into 2020. So this new rule isn’t costing you more.  The potential change will be in how much mortgage you will qualify for: up to 20% less. You may need to plan on purchasing a less expensive home, or save up a larger downpayment, or ensure you eliminate all or most of your other debts.
  • Are any loans grandfathered? The new mortgage rate stress test does not apply when:
    • A mortgage loan insurance application was received before October 17, 2016;
    • The lender made a legally binding commitment to make the loan before October 17, 2016; or,
    • The borrower entered into a legally binding agreement of purchase and sale for the property against which the loan was secured before October 17, 2016.

The Conventional Mortgage Rule (with more than 20% down/equity).
Maybe you have more than 20% down or equity in your home and you are planning to purchase, renew or refinance. Since you have strong equity, you aren’t considered a “high-ratio” borrower.

  • What’s changed? Effective November 30th, any mortgage loans that lenders insure using portfolio insurance must now meet eligibility criteria applicable to “high ratio” mortgages, including the new qualifying stress test. This means that rental properties, properties over $1 million, and mortgages with an amortization greater than 25 years will no longer be eligible for portfolio insurance.
  • Does this mean I will have trouble getting a mortgage? Certainly not. The change will only affect certain lenders that insure or securitize these types of mortgages. I have access to a wide-range of lenders, which means I can help you find the best mortgage for your situation. But if you are thinking of refinancing, get in touch now just to be sure you lock in a low rate.

The Capital Gains Reporting Rule

Canadians love the capital gains exemption they get on their primary residence: if your home grows in value, you aren’t taxed on that growth when you sell.

  • What’s changed? Starting this tax year, the sale of a primary residence must be reported at tax time to the Canada Revenue Agency, even though all capital gains are still tax exempt.
  • Why? This new rule was designed to prevent foreign property purchasers from claiming a primary residence tax exemption to which they are not entitled.

Although there are definite regional variations, the Canadian housing market is strong. A good part of the reason for that strength is that we have had stringent mortgage requirements. Mortgage defaults in Canada continue to be very low: in spite of the ups and downs of the economy.

The new rules are aimed at ensuring home ownership continues to be a solid, long-term investment. Contact the team at MiMortgage.ca: We’ll help ensure you make the most of it!


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Who’s Got An Unbelievable 5 Yr Rate Today????

Look No Further!

Mortgage Intelligence has  5 yr fixed rates as low as 2.79%

lowest mortgage rate specialIf you need a mortgage contact us today using the handy form below or Apply now with our secure on-line application!


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Your Best Option Is Using a Mortgage Broker.

Mortgage Brokers Gain More Ground!

But don’t take our word for it! On the Go Magazine published an article expelling the reasons that wise consumers use Mortgage Brokers. Four advantages are:

$ reasons to use  a Mortgage Broker

  1. Choice of many lenders rather than just one Bank
  2. Advice of experienced brokers that can offer alternatives and complimentary financial options
  3. Service when you need it. Most Mortgage Brokers are more flexible to meet with you than a Bank
  4. Savings through their wide choice of lenders and directing you to the best mortgage to meet your financial goals.

Visit On the Go Magazine to read the entire article.

If you have used the services of a Mortgage Broker, tell us why you did?

Apply Now.

It's So Easy!

It’s So Easy!


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No More Mortgage Letdown!

Avoid being turned down at a Bank

  Mortgage Intelligence has over 50 lenders.

Don’t suffer from Mortgage letdown!

Apply today!  Start Saving tomorrow!

It's So Easy!

It’s So Easy!


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Holly Cow! What A Great Rate.

 

 

Holy Cow That’s A great Rate Special

Mortgage Rate Special                   

 2.2% for 5 year mortgages.

Its time for you to save when you need a Mortgage!

It's So Easy!

It’s So Easy!


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First Time Buyers… Don’t Be A Pawn!

Avoid becoming A Pawn to RBC’s Realtor Promotion

Don't be a pawn!

image courtesy of chesskid.com

Recently RBC announced that they will pay a Realtor $1000 to refer first time home buyers to them for a mortgage. RBC is Canada’s largest Bank and the largest provider of Mortgages in the country, but it seems they want a piece of the first time buyer business that Mortgage Brokers enjoy.

CMHC has shown that about 44% of first time buyers use Mortgage Brokers. No surprises here! First time buyers are generally computer and Internet savvy and they are comfortable getting their mortgage by using on-line applications. They often enjoy completing the transaction electronically just as a matter of not having to make an appointment.

Excerpt from Globe and Mail article:

The cash offer is part of Royal Bank’s referral awards program for real estate agents. The program allows agents to collect points for referrals that they can trade for things like plane tickets, merchandise, gift cards or charitable donations.

Royal Bank is not the only lender to have a referral program for agents; a number have created such programs. They are controversial, and provincial watchdogs have differing rules for them. The bank’s program is not active in Alberta and Quebec, and the bank requires all realtors who participate to sign an agreement that includes a paragraph saying they will disclose to the home buyers that they are receiving compensation “in the form required under applicable law.”

If you are a first time buyer how would you feel knowing that you are being guided to use a lender, not because it’s the best option for your mortgagee, but rather so your Realtor can receive a fee, or plane tickets, even gift cards?

Consider that as of the writing of this article on June 3rd 2014, RBC is offering 5 year fixed rate mortgages at 4.94% on their official website while we as mortgage agents are offering 2.97% for the same term. If you will consider a 4 year mortgage term we can also offer 2.77% as a rate special.

A Mortgage will probably be the largest debt that you ever have so be sure you get the right type of mortgage with the best rate and terms for your personal goals.

Contact us today if you’d like to talk about meeting your own needs. 866-452-1100 or Apply on line now! Avoid being a pawn at RBC!


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Tighter Lending Rules Self-Employed are Targeted.

CMHC to introduce more changes to Self Employed Lending.

Over the past 5 years we have seen options for zero down mortgage, no income qualified, options, 40 year Amortizations disappear from the lending landscape. And its about to happen again as even stricter rules come into play at the en of May 2014.

With this in mind, we want to share a valuable video with you. Food for thought if you will. Don’t be let down if you need a mortgage! Watch our video and contact us using the handy form below. We can help!