Some big news in the mortgage world has been confirmed as of yesterday. The Office of the Superintendent of Financial Institutions Canada (OSFI) released an interim update on residential mortgage underwriting practices and procedures.
According to the Globe and Mail, and specifically this article: Regulator dials down proposed mortgage rule changes, Canada's banking regulator has decided to take a softer approach to tightening mortgage underwriting rules.
Originally, OSFI was proposing that all banks insist on re-qualifying all borrowers at mortgage renewal. This sparked fear in the broker world as it could force some to actually lose their homes. The ramifications of such a rule would truly alter the real estate markets across Canada. Currently, if you decide to stay with your current lender, they'll issue a letter and it's business as usual to continue on with their services with today's interest rates in mind. Moving lenders at mortgage renewal time requires re-qualification and this is currently standard procedure. A slight inconvenience for some; however, the savings can be astronomical and definitely worth the effort.
Instead of a complete re-qualification at mortgage renewal, should you decide to stay with your current lender, banks will focus on the borrower's payment history as opposed to relying on property values and individual income sources. My advice to you is always make your mortgage payments and make them on time. If there is some extenuating circumstance that will hinder your abilities to do so, contact me and we'll figure out a Plan B.
I will be sure to keep you posted once the final details are released, we should have confirmation on all of the rule changes by the end of June.
If you currently have a mortgage that is coming up for renewal, contact me today. As an independent mortgage professional, I have acess to a plethora of mortgage products and lenders that suit your needs and lifestyle...oh, and my services are absolutely free for typical residential mortgages. Let's start your journey to financial freedom today!
As always, I encourage you to contact me if you have any questions with your current mortgage or are looking for one. Please find me on facebook at Jason Nesseth | Mortgage Specialist | British Columbia and on twitter @jasonmortgages.
"Working with you for the life of your mortgage"
Jason Nesseth with TMG The Mortgage Group Canada Inc. If you have any questions or comments about this blog, please feel free to call Jason at 604.375.7375, email jason.n@mortgagegroup.com or visit his website at jasonnesseth.com