B-20 Guideline Update
Tuesday May 08th, 2018
The mortage market over the last few years has seen a lot of changes, some of which are very confusing and often, misunderstood. Having the right professionalsin your corner is the only sure-fire way to make the most of your new home purchase, investment property and the future of your financial health and wealth. Below are some key points and tidbits to bear in mind. for more details or to understand how this affects you, call us today!
* More than ever, big banks and niche lenders alike are being very conservative, are feeling that their lending policices are under a microscope and are asking for more documentation before agreeing to lend. Each lender has also issue their own interpretations ofthe new guidelines, hence some wide-spread consumer confusion.
* home purchases and new refinance transactions must be stress-tested regardless of how much equity or down payment is in your home. That is, you must qualify as if rates were 2% higher than they are today (or based on bank on Bank of Canadabenchmark rate, if this is higher).
* Purchase agreementssigned before january 1, 2018 can be grandfathered under old qualifcation rules. These applications, with 20% down or more, generally do not require stress-testing.
* For mortgages on purchases with less than 20% down (known as high-ratio insured), it is business as usual. these files were already stress-tested before the introduction of the new rules, and continue in the same way.
* Existing mortgages closed under old rules are eligble for transfer to a new instituation of your choice.
David Salamone MBA, CIM
Mortgage Broker M14001061
7827 Kipling Ave, Woodbridge, ON, L4L 1Z4
P: 416.997.7382 F: 905.652.0148