There has been a lot of discussion around mortgage insurance qualifications as of late. We can rest assured knowing private default insurer Genworth Canada saw no need to follow CMHC and tighten its mortgage rules. Canada Guaranty, which has the lowest loss ratio in the mortgage insurance industry, made the same determination, saying, “Given the implementation of the qualifying stress test and historic default patterns, Canada Guaranty does not anticipate borrower debt-service ratios at the time of origination to be a significant predictor of mortgage defaults.”
CMHC is not banning all borrowed down payments. It will still allow down payment funds that originate from:
- A loan from one’s own RRSP (using the Home Buyers Plan).
- A HELOC on another property that the borrower owns.
- A HELOC on a property their parents own (if the parents gift those funds to the borrower).
- Note: CMHC will no longer allow down payment funds from unsecured borrowing. That includes from a HELOC on a property the borrower’s parents own — if the parents loan those funds to the borrower.
- CMHC adds that “eligible traditional sources of down payment may include: savings, the sale of a property, non-repayable financial gift from a relative, funds borrowed against their liquid financial assets, funds borrowed against their real property, or a government grant.”
It’s Now Official: Our neighbour to the south is now in recession.
Double the Deferrals: Canada’ has nearly twice as many people deferring mortgage payments than the U.S.
Rate cuts: There have been a lot of decreases (and misreporting on this). We help secure these for those who qualify.
Record Home Prices: It’s almost like GTA home prices are taking their cues from the stock market. If HouseSigma’s estimate is right and the trend continues, GTA home values could potentially set a record in June.
Fully Reversed: Rates on reverse mortgages sprang up in April, but now every single reverse mortgage rate in Canada is below 5% — for the first time ever.
Brokers Kill It: Despite all the headwinds from online competitors, banks, a slowing economy, and mortgage regulations (or perhaps because of mortgage regulations), Canada’s two leading mortgage broker firms are cleaning up. Dominion Lending Group posted a vigorous 30% growth rate and $8.4 billion of closed mortgages in the first quarter. Meanwhile, Rival M3 Mortgage Group told the Spy it closed 32% more deals and $9.3 billion in Q1. M3’s EVP Dino Di Pancrazio said:
“Our brokers are less reliant of walk-in traffic and most are used to doing business at a distance.” They’re also used to “advising customers in many different financial situations and I think that this became increasingly valuable as some people saw their salaries cut or lost their jobs.”
Even in the face of unprecedented change, there are positive factors to consider. We will get through this and recover stronger than before.
Angela Calla is a 16-year award-winning woman of influence and mortgage expert. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. She educates and empowers individuals on the “The Mortgage Show”, which she’s hosted for over a decade and is the best selling author of The Mortgage Code available on Amazon. All proceeds from her book sales are donated to Access Youth Outreach services, a local charity in our community supporting our youth.
Angela leads by example with passion and conviction. She is known as an industry expert on TV and radio and the go-to source for publishers across the Country. On top of all her achievements, Angela finds the time to be a loving wife and mother of two beautiful children.
For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at firstname.lastname@example.org or 604-939-8777.