Genworth MI Canada Inc. Confirms that It Does Not Plan to Change Its Underwriting Policy

General Angela Calla 8 Jun

Genworth MI Canada Inc. (the “Company“) (TSX: MIC) confirms that it has no plans to change its underwriting policy related to debt service ratio limits, minimum credit score and down payment requirements. One of the Company’s competitors announced changes to their internal underwriting guidelines with respect to the aforementioned underwriting criteria on June 4, 2020.

“Genworth Canada believes that its risk management framework, its dynamic underwriting policies and processes and its ongoing monitoring of conditions and market developments allow it to prudently adjudicate and manage its mortgage insurance exposure, including its exposure to this segment of borrowers with lower credit scores or higher debt service ratios,” said Stuart Levings, President and CEO.

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Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

Angela Calla Discusses CMHC Changes on The Jill Bennett Show

General Angela Calla 5 Jun

I wanted to touch base to update you on what to expect with the new CMHC updates. Learn more about the update here and listen to Angela’s segment with Jill Bennett here.

Who does this impact? People making a home purchase with less than a 20% down payment.

There haven’t been enough details released at this time to rush to conclusions. We will keep you updated as things go along. Remember to follow our Facebook or Instagram pages for updates!

Things to note:

  • This does not come into place until July 1st and only with CMHC purchases less than 20% down.
  • These updates are a CMHC initiative under the national housing act, NOT a the Ministry of Finance.
  • The other insurers have a meting next week with government and they would prefer to keep things the way they are. They don’t feel the losses that CMHC mentioned are consistent with there portfilios.
  • They said our default rate is still below a half of a percent and even in the crisis of 2008 people still paid their mortgages.
  • CMHC has a very different portfolio than the other insurers.
  • With the deferral program ALL insurers were brought to the table. This update is ONLY CMHC and it was done under the National Housing Act NOT directed by the Ministry of Finance

Some other changes are relative to your credit score – one borrower has to have a score of 680 (average Canadian score is 650) – and you will not be able to use a borrowed downpayment.

We protect credit scores and help improve them by using only one application to shop all lenders. Most lenders already have these credit score minimums in place.

Most lenders already implementing the non-borrowed down payment policy and most who would take that route don’t have the income to qualify to do so anyway.

IF this is something the other insurers are forced to follow it will reduce buying power for those who need it most by 10% on average for those purchasing with less than 20% down.

We will be here to help you through all these changes when the time comes. We are available anytime at callateam@dominionlending.ca to help guide you.

Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

BREAKING NEWS!! Updates to CMHC Insured Mortgages & Why There’s No Need to Panic

General Angela Calla 4 Jun

The CMHC just released its new underwriting criteria effective July 1st for those purchasing with less than 20% down.

  • The minimum credit score will increase to 680 from the previous 600
  • Borrowing ratios of income percentage will tighten up a bit
  • They will not allow borrowed down payments ie. Lines of Credit, credit cards
  • Maximum gross debt service (GDS) ratio drops from to 35
  • Maximum total debt service (TDS) ratio drops from 42

This release is a CMHC ONLY initiative! There are still two other insurers in Canada who do not see the same risks.

Further to this, the Bank of Canada feels very strongly about our economy, recently announcing interest rates will continue to stay low.

Learn more about this announcement here.

Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

Lenders and How a Mortgage Professional can help you avoid a $30,000 Penalty

General Angela Calla 1 Jun

As an independent mortgage professional, I grow more and more grateful for the opportunity to help our clients get the best mortgage (without bias and while protecting their credit score) when I hear unfortunate stories like Kristina’s. Read it here.

When Kristina Barybina’s income quickly dried up due to this pandemic she knew there’d be a penalty for getting out of the mortgage early – she just wasn’t expecting it to be almost $30,000.

7 out of 10 Canadians will break their mortgage prior to renewal – I can give you a long list of reason’s why, however, let’s try to keep this brief. People often say, “It doesn’t matter, I’m not going to need to sell” or “I am never going to have to break my mortgage”.

The lenders noted in this article are fantastic lenders, ones that we use when its warranted to do so and in the best interest of the client. Some Canadians can qualify for a better mortgage that does not have posted rates and results in a MUCH lower exit penalty. Those who have a higher penalty may not have been able to qualify for a mortgage with these lenders.

Hopefully, if you are reading this, you will want to verify which lenders you can qualify for to protect yourself and those you love by consulting with us.

Today is evidence that NOBODY can predict the future so IF you can qualify for a better mortgage through a monoline lender ONLY accessible by an INDEPENDENT mortgage professional, why would you sign on to pay more?

We go over this and the why behind everything mortgage in my book The Mortgage Code.

Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

Financial Literacy with Enriched Academy

General Angela Calla 29 May

If you missed the Financial Literacy session with Enriched Academy’s Kevin Cochran you’re in luck! Here’s the entire 75-minute session!!

I recommend that every KID, TEEN, and YOUNG ADULT watch this! Make it your entertainment during dinner or when relaxing before bed. Every parent should watch this tonight with your children!

This session will change your children’s perspective on money by helping them simplify its importance to better understand it.

An unbeatable investment of time! Feel free to share.

Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

Angela Calla on The CKNW Mike Smyth Show

General Angela Calla 22 May

I joined Mike Smyth on his show this morning to bring some clarity to the recent CMHC discussion around increasing the minimum required down payment on home purchases under $500,000.

It is CMHC’s job to evaluate everything from every aspect – how many people have deferred their mortgages and defaulted and what that will look like when they go back to work. Of course, if we put more money down we’ll have more of a cushion but in speaking to other insurers they have been silent on the matter.

I believe 5% is here to stay. The default rate is still well below .5% across the country. Generally when we see mortgage insurers come out with something they’re going to come out with it in unison as we saw with the Mortgage Deferral.

Listen to the show here.

Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

Warning for First Time Homebuyers

General Angela Calla 20 May

Could the minimum down payment in Canada soon be increased to 10%? It’s possible.

In his address to the House of Commons Standing Committee yesterday, the head of CMHC, Evan Siddall, stated: “Unless we act, a first time homebuyer purchasing a $300,000 home with a 5 percent down payment stands to lose over $45,000 on their $15,000 investment if prices fall by 10 percent… In comparison, a 10 percent down payment offers more of a cushion against possible losses.”

Other key highlights from Siddall’s address:

  • CMHC is now forecasting a decline in average house prices of 9-18% in the coming 12 months
  • CMHC estimates that 12% of mortgage holders have elected to defer payments so far, and that figure could reach nearly 20 percent by September.
  • Canada’s household debt-to-GDP ratio will increase to more than 115 percent in the second quarter of 2020, and reach 130 percent by September, due to increased borrowing and GDP declines. Pre-crisis debt-to-GDP was 99 percent
  • Looking at debt multiples of disposable income, CMHC estimates this measure will climb from 176 percent in late 2019 to well over 200 percent through 2021

Predictions, indeed that will impact those purchasing 500k or below. The future remains to be seen, and the other insurers have yet to comment.

We will always be here to help you and those you care about most about navigate the now.

Learn more here.

Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

Angela Calla on Global News – Clarifying Reverse Mortgages

General Angela Calla 20 May

I did a segment with Global News BC to help educate Canadians on Reverse Mortgages as an option.

This could be a great wealth-building tool for those over the age of 55 who are:

  • Looking to purchase additional property without selling their home
  • Wanting the freedom of no mortgage payments
  • Desire a home renovation without accumulating payments or pulling out investments
  • Looking to consolidate outside and/or high-interest credit card debt
  • Gift inheritance with a warm hand
  • Worried about having enough investment income to properly fund retirement
  • Protecting their government benefits and using their capital tax-free
  • Or want to go through a divorce without selling their home or having payments

The Reverse Mortgage goes up to approx. 50% of your properties value and there is no stress test to qualify. If you know someone over 55 that would like to review their options watch this segment and share it with someone you care about who may be struggling during these challenging times or who wants to make sure they’re protecting their investments.

Click here to watch the Global News segment on Reverse Mortgages.

Here’s a link to an article I wrote on Reverse Mortgages.

The Reverse Mortgage isn’t for everyone, but whatever stage of life you’re in we have a mortgage for you. It’s all part of your journey and we’re always here to help.

Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

The Math on Mortgage Deferrals

General Angela Calla 15 May

The Real Costs. The Facts. The Myths.

There are opinions and articles circulating that say taking the 6 month mortgage deferral option could result in your payments increasing by $800 a month at the end of the deferral period. This is just not so. You’ve probably also heard that lenders will charge interest on top of interest and that this is going to cost you a fortune. Well it’s not going to cost you a fortune. Let’s do the real math here.

Let’s take a $400,000 mortgage at a 3.0% interest rate on a 5 year fixed term that originally had a 25 year amortization, meaning the life of the mortgage is 25 years. The monthly payment is about $1,900. Now let’s say the borrowers are two and a half years into their five year term and decide to take the 6 month deferral option. They will save $11,400 in cash flow over this 6 month deferral period by not paying principal and interest. Now it’s true that the lender will likely charge interest each month on the interest that was never paid. In technical terms, this is called monthly compounding.

At the end of the 6 month deferral period, the mortgage balance is now higher than it would have been by the principal that was never paid down and the additional interest costs. The additional interest costs amount to approximately $75 over the 6 month deferral period in this case. But the mortgage amount is now higher and there are 2 years left in the mortgage term and 22 years remaining in the life of the mortgage. Since the new payments of $1,960 per month are recalculated based on the remaining life of the mortgage, the additional interest cost over the next 2 years in the term is another $650, and the borrowers will also pay another $3,525 in interest over the final 20 years remaining in the life of the mortgage. The grand total in extra interest costs is about $4,250 over the next 22 years for the benefit of deferring $11,400 for 6 months, and the payments only went up by $60 per month.

How about another example looking at an $800,000 mortgage with a 3.0% interest rate on a 2 year fixed term and a remaining life of 15 years? This is a more aggressive mortgage situation. The monthly payment starts at $5,525 and the borrowers decide to take the 6 month deferral option with 1 year left in the term, saving $33,150 in cash flow over the deferral period. After the deferral period the new monthly payment goes up by $250 per month, not $800 per month, and the total additional interest cost for taking the deferral option is $7,450 spread over more than 13 years.

Different lenders have different methods for their deferral program, but this is generally what we are seeing from many lenders. Some lenders are keeping the same monthly payment amount until the end of the mortgage term, which means the interest cost will be slightly higher because the principal is not being paid down as fast, and the payment will go higher at renewal.

The deferral programs are meant to address those facing financial hardship and difficulties making payments, and each lender has its own policies on how much evidence they require to prove this. For those that are in this situation, there are certainly additional costs with taking the deferral option, as there should be. But they are certainly not as high as some of the perceptions and expectations out there that I’ve come across, which seem to be fear driving fiction rather than balancing the facts. There is a significant benefit of being able to save on cash flow during this difficult time period ahead and lenders have offered this program because they know it can help their clients. So from a purely mathematical point of view, if you can make your mortgage payments, make them and avoid the additional interest costs, but if you qualify for the deferral and need it, don’t fear it, it’s not as costly as some of the rumours and misguided advice out there. And you can always use your prepayment feature to bring the principal amount back down again once you have the funds to do so.

Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.

COVID-19 Aid for Seniors

General Angela Calla 12 May

Nearly two months into living in some form of isolation, watching retirement savings take a hit, and having to take additional health precautions due to the COVID-19 pandemic, eligible seniors are set to receive a one-time tax-free payment of up to $500.

“There’s no question that COVID-19 has been taking its toll on seniors both emotionally and financially… our government is taking action to alleviate some of the stress they may be feeling,” said Prime Minister Justin Trudeau, adding that there’s still work ahead to find long-term solutions to how Canada’s elderly are cared for.

Who is eligible for the Canadian government’s new COVID-19 aid for seniors?

Any senior who is eligible for the Old Age Security (OAS) pension will receive a $300 payment, and an additional $200 is being sent to seniors eligible for the Guaranteed Income Supplement (GIS). No application is required to receive this one-time payment.

Seniors are a demographic that continues to be hardest hit from a health standpoint by COVID-19, with deadly outbreaks in long-term care homes across the country. Others are facing additional economic challenges as many live on a fixed income and have expressed concerns about their ability to make ends meet during this time.

If you, or someone you know, have investments that have suffered during this pandemic the Reverse Mortgage which allows you to access your equity without penalty might be the solution you’re looking for. Contact us at callateam@dominionlending.ca for more info.

Learn more about the seniors’ aid here.

Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at callateam@dominionlending.ca or 604-802-3983.