Canada First Mortgage

Tara Walton/Toronto Star By Bryan Borzykowski |

Last September, my wife and I started scouring the city for a new house. We were living in a cozy bungalow, but with a growing kid and another on the way, we decided it was time to move.

Buying a new house is, of course, expensive, so I wanted to do whatever it took to reduce my costs. Most of the fees couldn’t be avoided, but there was one costly payment I desperately wanted to steer clear from: The mortgage penalty charge.

I had just over 12 months left on my five-year mortgage term, which meant that I either had to break my mortgage or stay with my current lender by transferring my mortgage to my new house. The latter option would have allowed me to avoid the fee. However, my lender couldn’t give me the best interest rate.

The new lender, a bank, was offering a variable rate of 2.25 per cent, a much lower rate than my old lender was willing to offer. I calculated that over the term I’d be better off paying the fee and taking the lower rate.

It was going to cost me $10,000 to break my contract. It felt like an unnecessary cost — I paid my lender so much in interest over the four years, why would I have to cough up so much cash?

I asked my broker to see if the lender would waive the fee, even though I was using a new lender for my next house, but they didn’t. Peter Veselinovich, vice-president of banking and mortgage operations at Investors Group, isn’t surprised. “The charge isn’t negotiable,” he says.

While the penalty may seem like an arbitrary sum, it’s not a cash-grab, he says.

The lender takes mortgage funds from money invested in GICs and other products and then it pays investors interest on those investments.

The idea is to match a five-year mortgage with a five-year GIC, so investors can get paid back at the same time as the mortgage comes due.

If a mortgage is broken, the lender needs to come up with money to fill the gap between the investment coming due and the mortgage ending. Hence the fee. The lender then takes that lump sum and invests it, so it can pay investors back when its GIC comes due.

The penalty is calculated two ways: you either pay 90 days of interest or what’s called an interest-rate differential, which is a penalty based on your old rate and a new rate based on a shorter term.

For example, let’s say you wanted to exit your 5 per cent five-year term with three years left to go. The lender would look at the current three-year term rate, which, say, is 3 per cent, and then charge you interest on the difference, 2 per cent, for 36 months. The sum also depends on how much money you still owe the bank.

However it’s calculated, the payment can be huge.

Darick Battaglia, a mortgage broker and owner of Dominion Lending Centres’ Barrie location, says that while it may seem as though people have to empty their bank account to pay the penalty, ultimately, by paying the lower rate, they’re getting that money back in mortgage savings.

Whether you’re moving houses, or just want to break a mortgage to take advantage of a lower interest rate, people often pay the penalty so they can free up more disposable income.

“It can help people get into a better financial position, because they have more disposable income,” says Battaglia. “They may find that it’s better to invest that money in an RRSP.”

If you’re moving, there are strategies to help reduce the penalty or even not pay it at all.

Almost all mortgages allow people to put a certain percentage of money down on a house every year; I was allowed to pay 20 per cent of my balance every 12 months.

In some cases, lenders will allow you to designate the first 20 per cent — it could be less or more depending on your lender — of the proceeds of a sale of a house towards the prepayment in order to pay down the outstanding balance and so reduce the mortgage penalty.

Investors Group is one institution that allows this, but not all do.

Battaglia has dealt with many lenders who refuse to honor this type of arrangement. They want two checks: one for the prepayment and one to pay off the mortgage.

My own lender refused to let me make one payment; I had to borrow money from my broker, who paid my prepayment three days before closing. I had to pay him back with some of the proceeds of the sale. It was a major hassle. But I did save about $1,500.

Some lenders will eat the fees themselves to retain the business. Again, most want the money. Battaglia says that some banks — he’s seen this happen with Scotiabank and TD — will waive the fee as long as you extend your term. He often uses the penalty as a negotiating tool.

“I’ll tell a lender I’m shopping around and while we’d like to keep a client’s business with your company, what can you do on the penalty?” he says. “A lot of times the penalty gets reduced or it’s paid off by the lender.”

Porting a mortgage to a new house is another way to avoid the fee.

Let’s say you have $100,000 left on a mortgage with a 4 per cent rate, but you need $200,000 more for the new house. The bank will give you the additional money at the new rate, which could be 3 per cent. You’d keep the same term or extend it and now you’d pay a blended rate, in this case 3.5 per cent on $300,000.

“There are no penalty costs, because you’re still honouring the original contract,” says Veselinovich.

Most people will have to open their wallet when they break a mortgage.

Fortunately, you can avoid paying administration fees that the lender will charge you. It’s not necessarily a big cost — Veselinovich says people get charged between $75 and a few hundred dollars — but why pay more money than you have to?

“These fees should be readily negotiable based on your past performance and your relationship with the lender,” he says.

While I did get my penalty reduced by making a prepayment before closing, I still had to write a cheque for about $8,000. It was painful at the time, but now that I’m in my new house, paying a new mortgage at a much lower rate, I don’t think about the penalty anymore.

Now I have to figure out a way to convince Best Buy to give me a deal on TVs http://www.moneyville.ca/article/981221–why-i-paid-10-000-to-break-my-mortgage

Several years ago, TD broker services offered a 12 month rate hold for brokers to access for folks who were buying a new construction home.  Eventually however, they took this product away from our channel.  Why?  Personally I believe it was because of timing.  The timing of the markets proved that while TD was offering security to the borrower by blocking funds for a 12 month time, interest rates were going DOWN during that 12 month period.  So what ends up happening is this scenario:

1.)  Borrower decides to build a home

2.)  Borrower needs a mortgage

3.)  Borrower needs to waive conditions to financing in about a weeks time after the paperwork is drafted by the builder

4.)  Meanwhile, shovel to dirt doesn’t happen for weeks afterwards

5.)  Mortgage is granted to borrower based on immediate credit, employment, and down payment circumstances.  So mortgage sits in place at a slightly inflated rate compared to the “best on the market” at that time to hedge against market interest rate increases.  Still have to wait 8 - 12 months (or so) before actually taking possession of the home.

6.)  8 months or so rolls around and borrower finds out that their possession is 8 weeks away.  At this time, rates have come DOWN and their interest rate that was held for them 8 months ago seems way too high.

7.)  Borrower decides to move the mortgage financing to another institution to get a better rate because original lender has the best rate held for them, that could be held for that period of time.

END RESULT?  At the end of the day, the Lender has blocked funds for months at a time that do not make any money.  What the broker channel was doing, was in essence “using” TD bank to hold the rate during construction of the home.  (Bad practice in the eyes of TD….but serving the borrowers best interest!)
Is this blog about TD having come back with their product to the broker channel?  No.  It IS about another lender (not a ‘bank’) that has come to selected brokers that can have access to not only 12 month rate holds…but 18 month rate holds!  Are the rates inflated based on ‘todays best rates’?  Of course…but that’s the nature of such long rate holds.  Blocking funds for that long require a little security on the lenders behalf.
WHY I THINK IT WILL WORK FOR THIS LENDER…
Timing.  Look at the rates; where does everyone think they’re going??

The answer:  UP.  The question is “What will the average BEST interest rate look like in 12 or 18 months time from now”?  Chances are that you will have a decent rate by holding your rate through this lender by the time you need to take possession of your home.  The outcome?  Very nice….

Of course, this prompts a completely different conversation about ‘do’s and don’ts’ while waiting for your home to be built….but we can talk about that directly with one another.
LAST POINT TO MAKE….

Yes….we have access to this lender that will hold this rate for you while you’re waiting for your home to be built.  Talk to us, we’ll fill you in with all the details!

The viral volcano erupted this week.  Quickly!  An RBC specialist was out claiming many falsehoods about the differences between RBC Mobile Mortgage Specialists, and Canadian Mortgage Brokers and Associates.  It does not bode well for either the Mobile Specialist, nor RBC in the wake of the disaster…

Claims such as “Brokers will charge you hidden fees”, “Brokers will FARM OUT your mortgage application to numerous lenders based on only the lowest interest rate, no other factors“, “the broker will pull numerous credit bureaus based on their software capability”, “Brokers cannot fit your mortgage solution together”….it goes on.

Such dangerous comments are cause for the gloves to hit the ice, fists in the air, and a stance that’s ready to fight….right?!  Well, it seems that the broker channel has held a little more class than that.  We understand that these mortgage specialists are out to compete with us…it would only hurt the entire industry if we returned a punch.  Hey - maybe it was a playoff tactic?  Maybe she was trying to lure us into a penalty.  Guess what…didn’t work.  Looks like you’re the only one heading to the sin bin for your proverbial two minutes. If it happens we’re going to take our puck and go home….again.  We compete…and compete is what we will continue to do.  Our gloves will be kept on for the remainder of the game.

But listen….RBC:  We thank-you for the apology.

Here is RBC’s apology…

Hi there,

Just a quick note to let you know that not all lenders have moved their rates up…YET!  When fixed rates move up, it means there is very little margin in the pricing of their money.  Fixed rates are priced according to the Canadian bond market, and most lenders want to see a spread of anywhere between 1.35%, and 1.55%.  With the current bond margin spreads, the pricing of money has become extremely tight with the current fixed rates being offered, so the lenders are upping the interest rates to create more breathing room in their margins.  This is not uncommon…it happens with every lender when the bond market shifts.
Having said that, there are a couple lenders left who have indicated that they will be raising their interest rates by tomorrow; which means that TODAY we can still get in for about 3.89% for a 5yr. fixed rate….but only until tonight!
Any questions at all…just drop a line!

dan@canadafirstmortgage.com

But wait a minute, the government of Canada said on January 17th there will no longer be 35 yr. amortization periods offered after March 18th.  For the past two months we have been inundated with every broker in every corner of every city preaching “beware the mortgage rule changes - time is nigh!”  March 18th is in one day….time is indeed nigh for the INSURED mortgage rule changes.

Insured mortgages are mortgages that do not have greater than 20% equity in the home.  For example, if you purchase a home and do not have 20% down payment to purchase that home, then you will require an insured mortgage.  However, if you have 20% equity in the home - then you will require what’s considered a conventional mortgage.

When we say not all lenders will change their amortization periods, we simply mean that some lenders are choosing not to conform with the insured policies when it comes to offering conventional mortgages.  In fact, a couple lenders never actually took away their 40 year amortization periods for their conventional mortgages!  Seriously!!  Now…that’s not to say that you SHOULD choose these periods - that’s a separate conversation we should have; however it’s notable to mention that not all mortgages are created equally…and probably more importantly, that’s why you should be dealing with a mortgage broker.  We have the numerous lenders that offer many different mortgage products….including extended amortization periods past 30 yrs.!
Stuck with your mortgage situation or have questions?  We love questions and would love to assist you….anytime!

Happy St. Patrick’s Day

There are a pocket of home owners who fall in the cracks of the “new world of credit” (a.k.a: qualifying under tighter lending conditions), and there are concerns for the day that their mortgage comes up for renewal.  Let’s give an example; Let’s say that when you received your mortgage a few years back, you didn’t really fit with todays lending criteria.  We all know the changes; lending has tightened.  Unbelievable interest rates are still among us, but certainly we could agree that lending is not as easy as it once was.

If you fall into the category where you are already a home owner, but you qualified on yesteryears mortgage qualification criteria, you need to read this.  If you’re not sure if you need to read this…read it anyway.

Statistical data proves the Canadian broker channel is gaining MORE strength.  Now more than ever the expertise of a mortgage brokers service and advice has IMPACT, and it couldn’t come at a better time.  Our job is to know mortgage products and the available options to a myriad of situations.  Let me ask you this:

What if you fail to qualify on todays lending criteria, but you already own your home?  What do you do at renewal time, or when you need to refinance your mortgage?

This is what you need to know.  The world of mortgages is NOT just about what you see in the media, there’s more to be aware of.  But how are you to know that?  Well, quite candidly - that’s our “secret sauce”.  Not only do we offer the best of the best on the market, but we are also educated to be able to provide options to alternative lenders that just might be able to support your situation if you’re in a bind.  Let’s look at an example.  Let’s say:

-  Your credit has taken a hit over the course of the past year and your mortgage renewal is coming up - OR - you would like to refinance your mortgage for a better rate to take advantage of some cost savings.

-  You find that you just don’t fit ‘the new world of credit’ and feel trapped.

-  Traditional lenders do not want your business because of your temporary situation.

-  You hope that you don’t have to face drastic consequences because of this…

Now is the time to talk to us.  We realize that not everyone can have perfect credit all the time, especially coming out of a recession such as we experienced.  Heck, this whole recession was one large reason as to why lending guidelines changed!  A bit of a merry-go-round it would seem.

There is a large pocket of borrowers who face this EXACT situation as described above…we’re talking thousands of Canadians and I see it almost every week.  Know your options.  Talk to your broker - first.  The answers might just lay in the exclusive programs that only we have access to.  At the end of the day, you simply need to know that your options have been presented, and that your best interests are being looked after by viewing the landscape of all your options.

Sincerely,

Dan Mass

Lenders have tweaked, dissolved, and simply changed.  Some that have been known to be straight “sub-prime” lenders have tweaked to the point where they simply only look at “A” business.  Ask them about the days of sub-prime and they smile, maybe their hearts excite about the way things USED to be - but guaranteed they are happy with the “new” position they’ve taken.  But having said that - they’re now playing with a variety of other lenders that are vying for the same market position…and that’s a TOUGH game; each one trying for their fair share of the “A” market.

What is “A” business?

“A” business is considered; good credit / verifiable income / good financial net worth / and an all-around decent means of security for financing a mortgage.

SO - what about “B” business and is it still around?

YES, it certainly is!

What can we classify “B” as these days?  Well, let’s give you an example of a type of mortgage that was financed just this week by one of our lenders:

-  Dual application; credit scores were low 500’s, and mid 500’s - both credit bureaus struggling to show recent established credit, and both showing a bruised credit history.

-  10% down payment

-  One applicant business for self

3 yr. term over 35 year amortization period @ 6.60%…

FIRST TIME HOMEBUYERS!

Can you say “Happy Couple”?  This was their launch into their first mortgage. They also know that they have 3 yrs. to get positioned for the best rates on the market by cleaning up their past mistakes and establishing new/clean credit; but the important thing is that they are homeowners sooner, rather than later.

Although we may read ONLY of the lenders that push towards “A” business (because there’s SO many of them), we must remember of the lenders that tailor their guidelines for situations such as the above example.

OH yes…the secret ingredient?  This lender is only accessible through a mortgage broker.

Sincerely,

Dan Mass

dan@canadafirstmortgage.com

James Pasternak, Financial Post

It is a legal document that stretches about 30 pages and runs about 10,000 words. Its execution takes no more than a couple minutes and when the ink dries on the signature lines, more times than not it is never read and gets slipped into a file folder, largely forgotten.

But despite its casual handling, the residential mortgage agreement governs the largest debt of over 5 million Canadians and within its fine print are the provisions that can make or break a household’s financial future. There’s a lot at stake. At the beginning of 2004, Canadians held $517.7-billion in mortgages.

“I think most of the major bank representatives do a good job of explaining these provisions to their clients but I think most people zone out and don’t really listen. All they think about is getting a mortgage at 3.8% and ‘I want to get this done’,” says Len Rodness, Partner, of Toronto-based law firm Torkin Manes (www.torkinmanes.com)

But beyond the interest rate there are a wide range of options and clauses in the mortgage agreement that deserve scrutiny. In a competitive lending environment, shopping for the right mortgage can bring significant savings and peace of mind through the amortization period.

Take the case of Hamilton, Ont., couple Kathy Funke and Dan Perryman. When they were shopping for a home in 2003, the interest rate was the top priority. They also wanted flexible prepayment options and accelerated weekly mortgage payments. To leverage the competitive interest rate they received, they went with a variable rate mortgage. They paid off a $230,000 mortgage in 5 ½ years.

“The power in these things comes from people who know how to manage [the] various privileges. It has a huge [savings] effect on amortization….The ideal thing is to understand what your privileges are and then combine them to your advantage — to what you can afford to do; to fit your lifestyle and ability to pay,” says Jeff Atlin of Thornhill, Ont. based Abacus Mortgages Inc.

And privileges there are. You just have to shop for them.

Accelerated Payment Options: Getting the loan paid earlier

It just seemed like yesteryear when everyone was paying their mortgage on the 1st of every month. Now, in addition to the first of the month option, some of the more common options are accelerated weekly and biweekly or semi-monthly options.

These frequency options result in long term savings. For example if one selects the accelerated biweekly option one is making 26 payments in a year, the equivalent of two prepayments per year over the monthly option. When a $150,000 mortgage amortized over 25 years is paid under an accelerated bi-weekly option, the debt is retired in 21 years and the interest savings are around $18,000.

Toronto resident and electrician Karl Klos, 26, selected “weekly rapid” payments on a mortgage amortized over 35 years. The mortgage payments are made each week but he added the “rapid” option by increasing the amount paid. Mr. Klos says that the payment frequency will pay off his mortgage in 25 years instead of 35 years.

“I can’t understand why anybody would do monthly payments anymore now that the banks offer the ability to have weekly payments. It may be a cash flow situation. If you do a weekly mortgage payment it could save you a significant amount of money,” says real estate lawyer Len Rodness.

Restating mortgage agreement vows

It doesn’t take long after one signs a mortgage agreement to hear from a neighbour or friend that they received a better rate. So when you dig out the mortgage agreement see if there’s a clause that allows borrowers to renegotiate their agreement before the end of the term. The bank might use a model called “blend and extend.” For example, if one has a $100,000 mortgage at 6% mortgage with two years to go they might blend it with the current five year rate of 3.79%. So according to mortgage broker Atlin when they average out 2/5 of the mortgage at 6% and 3/5 are at 3.79%, the customer will get a new reduced rate of about 4.6%. But the borrower is tied to the bank for another 5 years.

Putting spare cash against the mortgage with no penalty

Almost all mortgage agreements have options for mortgage prepayment without penalty. Klos’s mortgage agreement allows prepayments of up to 15% of the annual balance. Most financial institutions provide prepayment options in the 10-20% range. Some lenders allow borrowers to make the prepayment any time during the year while other agreements restrict the prepayment to the anniversary date.

Also, some financial institutions allow customers to make multiple smaller prepayments during the year as long as they don’t exceed the annual limit. Funke and Perryman were able to retire their $230,000 mortgage in 5 ½ years primarily because of the prepayment provisions in their mortgage.

Coming up with more money for each payment

Some lenders will allow borrowers to increase the payments without penalty. Depending on the wording of the mortgage agreement the increased payments can range from around 15% to 100% of the current payment. So if one is paying $1,000 per month under the 15% rule, a borrower can raise it to $1,150 per month. Klos’s weekly rapid payment plan was based on him raising the weekly payments by 5%.

“Payment and amortization are a function of each other. Any time you raise the payments you shorten the amortization; any time you shorten the amortization you raise the payment,” says Mr. Atlin.

The mortgage prenuptial: Penalties for getting out of your mortgage

“A mortgage is a contract first and foremost. It is a contract between a borrower and the lender,” Atlin says. And if someone hasn’t felt that cold business approach during the course of their mortgage, they certainly will if they try to leave early. Most borrowers pay out their mortgages when they sell their house, win a lottery or are offered a better interest rate by another company. Until recent years, the standard penalty for breaking a mortgage agreement was three months of interest. Paying out a $200,000 mortgage could amount to a $2,500 penalty.

In many current mortgage agreements, the penalty for an early exit (and not extending) is either three months of interest or an interest differential, whichever is greatest.

The mortgage differential penalty can be quite expensive. If a mortgage is at 5% interest rate and you have three years left in your term, the bank will use the difference between the agreement rate and the current market rate to calculate the penalty. Using the 5% case above, let’s say the current 3-year mortgage is available at 3.5%. The bank will charge the difference between 5% and 3.5% for the balance of your term.

Bank customers who have an open mortgage with a variable rate can usually pay them out with little or no penalty. Some mortgages are closed for the first few years and then revert to an open option. The penalties, if there are any, would be much lower once the mortgage converts to an open one. If one can, it would be best to wait until the mortgage kicks into open status.

When paying out the mortgage try to have some of it calculated as your annual no-penalty prepayment option. Therefore, if you are paying out a $200,000 mortgage and you also have a 20% per annum prepayment option you might be able to save penalties on $40,000. If the mortgage prepayments can only be done on the anniversary date, make sure that is the day you select to pay out the mortgage.

Mortgage Lifelines

Mortgages are often signed and sealed with the borrower having every intention to pay. However, the world is paved with best intentions and recessions are everyone else’s problem until the boss comes into your office with the bad news.

“That is something that nobody turns their attention to at the time. The original document is done. The legal issues are in that original document. For a practical point of view given the state of the economy these [clauses] might be something beneficial,” said Len Rodness of Torkin Manes.

Some mortgages include a Rainy Day option. This option allows the borrower to skip one principal and interest payment each mortgage year. The interest portion of the skipped payment or payments will be added to the outstanding principal balance.
Read more: http://www.financialpost.com/personal-finance/mortgage-centre/story.html?id=2631845#ixzz0iTZkol9e

Something interesting to observe in differences between the US and Canada equity positions…

By Garry Marr, Financial PostApril 23, 2009

Canadians continue to have more than two-thirds more equity in their home than Americans, according to a new survey.

The study for the Canadian Association of Accredited Mortgage Professionals shows Canadian homeowners have, on average, 72% equity in their house, compared with 43% for Americans.

“It is a very positive part of the Canadian housing story,” said Jim Murphy, chief executive of Toronto-based CAAMP. “Canadians pay down their mortgages. Canadians are just more conservative than Americans.”

The study also found that Canadians have dramatically reduced the amount of equity they are taking out of their home. A year ago 22% of Canadians had accessed the equity in their home through measures such as lines of credit. Today that is down to 15%.

“This speaks to the whole thing about people belt-tightening,” said Mr. Murphy.

Despite the drop in prices in the Canadians marketplace, only 2% of Canadian mortgage holders have negative equity, in which the value of their mortgage is higher than the value of their home.

About the only new risk Canadians seem to be taking on is longer amortizations. While 83% of Canadians have an amortizations of 25 years or less, the number with 30-year and 35-year amortizations is rising. In the past six months, 46% of new mortgages have been for amortization of more than 25 years.

“I don’t think it’s a worry because [Canadians] are paying down their mortgages,” said Will Dunning, chief economist with CAAMP, noting the percentage of Canadians in arrears on their mortgage is rising but the total is still 0.38% of all mortgage holders. “That’s the middle of historical averages.”

Mr. Dunning said the study also indicates that subprime mortgages are likely a very small percentage of the Canadian marketplace. Only 2% of all Canadian mortgages have interest rates of 8% or higher — the low-water level for what would constitute the rate on a sub prime mortgage.

The survey did show that Canadians are also taking advantage of continued drops in interest rates by increasingly buying into variablerate products. CAAMP says 28% of Canadians have variable-rate products that are tied to prime. The number is rising, with 36% of new mortgage orientation in the past 12 months going into variablerate products.

With the Bank of Canada’s decision to lower rates another 25 basis points and its commitment to not change rates for another year, Canadians are expected to continue to take advantage of a record-low prime rates, which are 2.25% at most financial institutions.

© Copyright (c) National Post

Ok…so we know it’s harder to get a mortgage these days.  Now-a-days, lenders and insurers want to know why you missed a payment a year ago, or 2 yrs. ago!  Sometimes it’s easy to forget to make a payment here and there, but when you “forget” to make the payment two months; THREE months in a row, they want to know what’s up!  The lending guidelines have definitely tightening the reigns…there’s no question.  A year ago, a missed payment or two would have been overlooked by many and discarded as, “ahh-well…at least they are “current” on all their debts NOW.”  Nope.  There’s more reason for lenders and insurers to clamp down on lending after the lax guidelines of yesteryear.

Just when you thought it was getting hard, Genworth (competitor to CMHC) decided that they are going to make things a little tougher.  Effective April 18th, if you want to refinance your home (between 90.01% - 95% of the value of your home), your minimum “allowable” credit score is going from 650, to 700.  A refinance on your home (between 85.01% - 90%) will require a 660 score; this is up from 600.

Also, currently if your credit score is above 680 - you are allowed up to 44% of your household income to go towards your monthly financial obligations (like credit cards, loans, etc.) and mortgage payments (Principle, Interest, Heat, and Taxes) - a.k.a; Total Debt Service (TDS).  Come April 18th, the total percentage allowable to go towards TDS will be 42%.

Business for self individuals?  It gets tougher.  Minimum down payment required is 10%.  This is up from a minimum of 5% down.  Credit score still needs to be impeccable minimum of 700.

At present, CMHC has not come up with any changes to their programs…but time will tell.  Usually when one moves, the others at least LISTEN really closely.  Am I worried about these changes?  I have to be honest…  At first glance when I read this, I thought - damn…that closes the doors on a lot of potential customers.  BUT, I can’t help but notice that the mortgage industry is simply taking a step back, and practising some very basic lending guidelines that were in effect years ago.  We have to remember that it wasn’t long ago that we had all these (what seemed like) ”rights” on the mortgage front.  We have to remind ourselves that getting a mortgage is still a priveledge…not a right.  We have to prove ourselves to banks…maybe a little more than what we had to prove ourselves with them a couple of years ago.  I know, I know….I can hear you screaming now; “you can’t just give all these allowances, and then take them away just like that!!”  Ummm….yes they can.  Let’s flip it over on it’s back for a second…

Let’s say YOU are the bank.  It’s YOUR money.  YOU have to make the decision on who to give a mortgage to, and who not to give a mortgage (your money) to.  After being fairly easy with your money and allowing mortgages on “lighter” guidelines, you found yourself losing a lot of your money.  Wouldn’t you want to tighten your belt too?

We know the old adage “one bad apple spoils the bunch”, right?  It’s not much different.

So, at the end of the day what we are left with is mortgage guidelines that look a little retro.  It’s not a bad thing….it’s an adjustment thing.

Sincerely,
Dan Mass, AMP

dan@canadafirstmortgage.com

403-294-0033