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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What line of credit mortgage means and how it can be beneficial for you

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You can experience unexpected expenses in your life. You may need money for maintenance or to complete a home project. In such cases, you need to access the assistance of a trusted financial partner who can offer the right suggestion to get you out of the financial need. Canada Innovative Financial is one such mortgage service that offers you timely assistance to manage your financial difficulties with ease. Mortgage brokers can offer you a line of credit mortgage that is better than a regular unsecured loan. You can access money on demand for a set period. Line of credit mortgages offer you flexibility.  You can borrow the money, pay it back, and repeat the process as necessary. When you access the assistance from the best mortgage experts in Canada, you can experience the following benefits with a line of credit:

Access To Instant Cash

You are gain access to credit immediately as required. You never have to wait a long time for processing. Without a delay in getting the funding, you can manage your financial needs without undue stress.

Lower Interest Rate

When you access the line of credit loan from the financial experts like Canada Innovative Financial, the interest rates are low. You pay less interest in this type of loan compared to others. Another important feature is that you pay interest only for the amount you use and not the entire amount available to you. The less expensive loans help you deal with your financial difficulties without the fear of huge interest charges.

Tax-Deductible Interest

The line of credit loan can be tax-deductible if you are borrowing for the purposes of a qualifying investment. So, when you pay the interest, you can add your income tax savings. You need to talk to your tax advisor for more details.

Use Funds for Any Purpose

When you take a line of credit mortgage, it is not limited to buying or completing projects for your home. You can use it for any purpose that requires immediate financial attention. If you have a secure job and can meet your financial obligations, and enough equity in your home, you have a good chance of approval.

To access the advantages offered, you need the assistance of the best mortgage broker like Canada Innovative Financial. The financial experts update you with the market changes and ensure you get the best deals without any hassles. Click on bc-mortgage-broker.ca to get assistance from experts to manage your financial problem with ease.

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

Is a debt consolidation mortgage a good choice help become debt-free?

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Leading a life with overwhelming debt is difficult. An overpowering debt in retirement with restricted salary can be significantly harder. If you have previously investigated various approaches to deal with debt, you may have run across information regarding debt consolidation, which combines different debts into one payment. It will work if the debt isn’t inordinate and you have great credit and an arrangement to hold debt under tight restraints. Debt consolidation moves debts with high interests, for example, bills of credit cards, into one payment of lower interest. It can pay off your all out debt and rearrange it so you pay it off quicker.

In case you’re managing a reasonable measure of debt and simply need to rearrange numerous bills with various loan costs, installments and due dates, debt consolidation is an excellent strategy to achieve this.

What is working mechanism of debt consolidation?

Working mechanism debt consolidation

There are two essential approaches to merge debt, the two of which concentrate the debt installments into one month to month bill:

1. A credit card balance transfer feature and no interest:

Transfer every one of your debts onto this card and cover the equalization during the limited time frame. Some credit card companies will offer promotions such as this.

2. A debt consolidation loan with a fixed interest rate:

Use the cash from the loan to clear off your debt, at that point repay the loan in regular installments over a pre-decided term.

There is a wide range of ways that you can opt for debt consolidation. You can get a home equity line of credit (HELOC), home refinancing to get money out of that equity, or get an approval of a personal loan from any bank or comparative monetary institution. The best choice for an individual relies upon his credit rating and profile, just as the ratio of debt to-income.

Is debt consolidation a good idea?

Debt Consolidation choice

A debt consolidation loan generally must meet the below criteria:

  • Your debt payments including mortgage payments doesn’t surpass 42% of your gross income.
  • Your credit is strong to obtain a low interest card, line of credit or debt consolidation loan of low interest.

Here’s a situation when debt consolidation will be helpful Suppose you have 4 credit cards that have a rate of interest ranging from 18.99% to 24.99%. You generally make your installments on a  scheduled date, so your credit is great. You may fit the bill for an unsecured debt consolidation loan at a much lower rate of interest, for example an interest rate of 7% — a much lower rate of interest.

For some individuals, debt consolidation uncovers a promising finish to your current circumstances and a fresh start to the future. If you obtain a loan that has a term of 3 years, you realize it will get cleared off in 3 years — provided that you make your installments on schedule and control your spending. On the other hand, making minimum installments on your credit cards will create months or years before you pay the dues.

Consolidating debt is an excellent idea that you should investigate. Find out all the choices that are available to you and pick the one that bodes well for your circumstance.  If you own a home and have some equity in it, we can help you with consolidating your debt to increase your cashflow and save you money.  Call us today at 604-318-1292.