Changes Within our Mortgage Industy
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Changes Within our Mortgage Industy

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Changes Within our Mortgage Industy Changes Within our Mortgage Industy Presentation Transcript

  • “Changes within our Mortgage Industry”
  • “Whoremembers…” • 100% Financing • 40 year Amortizations • Cash back mortgages • Qualifying for 1-4 year Fixed Rate Mortgages at contract rate • Qualifying for Variable Rate Mortgages (VRM) at contract rate • 95% Refinancing • 5% down payment for the purchase of investment/rental properties • No limit for your Gross Debt Servicing (GDS) if your credit was strong enough • Relaxed lending guidelines when debt servicing (GDS/TDS) • Secured and Unsecured lines of credit • Heating cost for Non subject and subject properties
  • “Changes within our Mortgage Industry…” July 2008 1. The elimination of 100% financing 2. 40 year amortizations dropped to 35 years 3. Min required credit scores 4. Total Debt Servicing (TDS) to be maxed at 45%
  • “Changes within our Mortgage Industry…” April 2010 1. Variable Rate Mortgages (VRM) must be qualified at the 5 year posted rate (4.99) 2. 1-4 year Fixed Term Mortgages must be qualified at the 5 year posted rate (4.99) 3. Fixed Term Mortgages 5 years and longer continue to be qualified at contract rate 4. A min of a 20% down payment Vs 5% for purchase of investment properties • Introduced new guidelines for Rental Add backs and debt servicing property tax and heat when calculating the TDS
  • “Changes within our Mortgage Industry…” March 2011 1. 35 year amortizations dropped to 30 years for conventional mortgages 2. 90% refinance dropped to 85% 3. Elimination of mortgage insurance on secured lines of credit
  • “Changes within our Mortgage Industry…” July 2012 1. 30 year amortizations dropped to 25 years for high ratio mortgages 2. 85% refinances dropped to 80% 3. Ban mortgage insurance on any million dollar homes • 20% min requirement for down payment 4. Elimination of cash back mortgages • Federal guidelines • Min requirement of 5% down • Provincial guidelines 5. Introduction to flex down mortgage products 6. Tougher guidelines within stated income mortgage products 7. Disappearance of true equity lending
  • “Changes within our Mortgage Industry…” February 28, 2014 1. CMHC increases default insurance as of May 1 5% 2.75% to 3.15% • 15% increase • Means avg of $5 per month 10% 2% to 2.4% 15% 1.75% to 1.8% 20% 1% to 1.25% 25% .65% to .75% 35% .50% to .60% Non traditional DP - 2.9% to 3.35% • These were the same premiums in ‘06 when CMHC decreased insurance premiums
  • “Changes within our Mortgage Industry…” What’s to come . . . 1. Jim Flaherty out Joe Oliver in • 73 yrs old • Former Bay Street Investment banker • Been serving as Natural Resource minister since 2011 • No forecasted changes as budget is already complete • Expected to be in office only till next term
  • “Changes within our Mortgage Industry…” What’s to come . . . 2. Tightening of calculating and debt servicing (GDS/TDS) – OSFI is now looking at MONOLINE INVESTORS • Debt servicing secured lines of credit limit or balance • 3 year post using 30/35 yrs amortization (limit) • 4.6% divided by 12 (limit) • Use interest only payments (balance) • Debt servicing unsecured lines of credit • 3% of the balance • 1% of the limit • Use what is reporting on the credit bureau • Debt servicing heating cost on subject and non subject properties Expectations of STANDARDIZTION implemented by OSFI
  • “Changes within our Mortgage Industry…” 2014 . . . • Difficulty of financing clients with 5 or more properties • Residential vs Commercial • Who still does them? • Which ones to use and why • Down payment requirements • Insurance Premiums • Amortizations • Rate • Debt Servicing • Utilizing Add backs, Offsets, DCR and Net Rent calculators Expectations of STANDARDIZTION with how the above is debt serviced implemented by OSFI
  • “Changes within our Mortgage Industry…” “Around the water cooler . . .” • REFINANCES from 80 % to 75% • Min DOWN PAYMENT to be 10% vs 5% • 25 year amortizations regardless of DOWN PAYMENT • Elimination of STATED INCOME for BFS • Expectations of STANDARDIZTION of debt servicing with all investors (monoline lenders)
  • “Conclusion…” • Additional changes are to come but what will they look like • Pending on Finance Minister • Tighten • Loosen • We have always adapted to the environment that we are faced with • Network • Like minded people • Problem solvers • Specialist and Experts in what they do
  • “ Lasting Quote…” “It is not the strongest of the species that survives, nor the most intelligent, but rather the one most adaptable to change.” Leon C. Megginson
  • The “GLMMortgageGroup”  Co founder and Director of the Imani Orphan Care Foundation • www.imaniorphancare.com  Over 15 years of real estate experience & Real Estate Investor  Member of • Better Business Bureau • Chamber of Commerce • Mortgage Brokers Association of British Columbia • Canadian Association of Accredited Mortgage Professionals  Mortgage educator/key note speaker … • Wealthy Investment Network • Business Network International  Regularly sourced for mortgage insights by the … • Vancouver Sun • Mortgage Broker News  Ranked amongst the top 3% mortgage brokers in Canada by CMP magazine  Finalist in 2013 CMP Canadian Mortgage Awards for Best Customer Service from an independent office
  • Contact Information www.geoffleemortgage.com Twitter: @geoffleeca Linked In: http://ca.linkedin.com/in/geoffleemortgage/ Email: geoff@geoffleemortgage.com Phone: 1.778.552.3489