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偶尔看到,贴上来共享。 仁者见仁,智者见智。

本文发表在 rolia.net 枫下论坛Mortgage Brief.. Mortgages rules explained… and why didn’t the govt consult experts?

They say we don’t read emails or articles anymore.. we just skim through them. But some things can’t be understood with a quick glance. The new mortgage rules will impact EVERYONE!

If you want to understand how they impact you, continue reading… If you don’t care or want to be oblivious, take the blue pill and move on.

I’ve put together a list of the mortgage rules so that you can understand what they mean and how they will impact you. Hey, let’s give The Federal govt some credit… they’ve been transparent about a few things, right?:

They want house prices to drop.
They don’t want anyone to have a mortgage if their home is worth more than $1,000,000.
They don’t want you to ever refinance your mortgage. You should only require a mortgage when you buy a house.
They don’t want you to buy a house and rent it out. You should only buy a rental property if it has 2 or more units.
Mortgages should not be amortized for longer than 25 years.
They want rates to go way up.

Here we go.. Forget the data and stats being reported today. Those stats don’t matter! We want to see the stats after March 30th, 2017.

Remember the mortgage rule changes of October 17th? How about the ones on November 30th? Get ready, we won’t see the full effect of these changes until after March 30th 2017.

That’s when the last of the mortgage approvals will have closed, that were done under the old rules. And all the new mortgage closings beyond this date, will have had to been qualified with the new rules. This is when we’ll begin to see the impact of these rules… And we’ll begin to see just how many Canadians will be have been impacted.

If you think I’m wrong, read the rule changes below and tell me what other conclusions you can come up with.

RULE CHANGES

“Stress-test” for hi-ratio mortgages. Borrowers buying with less than 20% down must qualify at the 5 yr posted Fixed rate, currently 4.64%. (this rule has received the most media attention, but this won’t impact that many as several lenders have been using this already).
“Stress-test for low-ratio mortgages. Pay ATTENTION. This rule affects far more Canadians than just first time homebuyers.. Lenders, Banks, etc have been getting portfolio insurance on mortgages for over a decade… invisible, and at no cost to the client. It allows Lenders to raise money more cheaply, and the end result is lower rates for Canadians. But now, Lenders must put these lower risk mortgages through the same ‘stress-test’. (make sense? of course not!). Here’s the details…

Purchases and mortgage transfers only. NO REFINANCES allowed. (Yup.. that’s right. Refinancing your mortgage is a bad thing, all of a sudden.)
25 year amortization maximum.
Purchase price must be below $1,000,000. If you are buying for more than this amount, and you want even a small mortgage of $100,000 or $200,000, you are going to find many Lenders will increase the interest rate or not offer anything at all. (you are reading this correctly…don’t worry. This is correct. This is how idiotic the new rules are).
Minimum credit score of 600. (not a big deal as most of us have much higher scores).
Maximum debt servicing ratios of 39% of your gross income to be used for housing costs (while this may sound ok for most, there are many circumstances where a client has reduced income, temporarily, of is on a pension with lots of equity in the home and just wants to borrow enough to get by for the next 5 or 10 years.. why can’t we allow them to access this money if the Lenders are willing to lend it? Again, this makes no sense and shows how little thought was put into these rules.)
No rental property mortgages allowed for single family homes. Yup, you read this right. For some unknown reason, the Govt decided that single family homes shouldn’t be rented out and therefore, not qualify for a mortgage. (this has to be the dumbest rule of them all. How many Canadians own a rental property or want to own a rental property? Why does the property have to have 2 units or more to qualify? Somebody pinch me, I’m having a nightmare.!!!)

THE REAL WORLD…INSIDE MORTGAGE APPROVAL CENTRES

End result has been chaos since October as Lenders are unclear on how and what the new rules actually mean and how they are to be implemented fully . Qualifying at Bank Posted 5 yr fixed rates isn’t a huge deal as most Canadians qualified on this anyway. The bigger changes are with regards to rental properties, maximum mortgage amounts, limitations based on purchase price, no refinances.. these are bigger issues that will impact all of us.

MORNEAU… Our Finance Minister talked with the Canadian Mortgage Brokers Association (CMBA) on October 14, 2016… only AFTER they announced the changes. I repeat, AFTER the changes were announced. When asked why CMBA was not consulted, Mr. Morneau just replied that the governments concern for consumer debt load was the reason for quick implementation. Wow, really, that’s it? I’ll repeat, Morneau consulted the CMBA just 3 days prior to the rules coming into effect!! Why bother meeting then? What a farce.

FUTURE RULES

Yes, there are even more rule changes proposed..

LENDER RISK SHARING.. CMHC insures around $500billion in mortgages. Any default by the borrower and loss to the lender, would be payable by CMHC. In theory, the govt is on the hook for any potential losses. However, Experts agree, that any real loss to the tax payer could only result from a very large drop in real estate values. Something we haven’t seen since 1990, and something that isn’t expected to happen.. Even by the most pessimistic.
INCOME TAX MEASURES… New rules would remove a loophole where a non-resident could own a Canadian home, and sell the home Capital Gains tax-free. Canadians enjoy being able to claim appreciation in their homes without tax (how often can you say that?)

Here’s another interesting forecast. The Canadian Real Estate Association (CREA) is forecasting for sales to rise by 6.2%. Stay tuned.. if this forecast is accurate, we will see more real estate and mortgage transactions… but tougher mortgage underwriting. Do yourself a favour and speak with an experience Mortgage Broker. Don’t rely on a robot or ‘do it yourself’ mortgage system to guide you. Mortgages have become far more complex than ever before. They continue to evolve. An advisor can help you make the right decision. They won’t tell you what to do, but they can spell out your options and give you unbiased, neutral advice.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Here is the link : 更多精彩文章及讨论,请光临枫下论坛 rolia.net
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Replies, comments and Discussions:

  • 枫下家园 / 枫下觅巢 / 偶尔看到,贴上来共享。 仁者见仁,智者见智。 +4
    本文发表在 rolia.net 枫下论坛Mortgage Brief.. Mortgages rules explained… and why didn’t the govt consult experts?

    They say we don’t read emails or articles anymore.. we just skim through them. But some things can’t be understood with a quick glance. The new mortgage rules will impact EVERYONE!

    If you want to understand how they impact you, continue reading… If you don’t care or want to be oblivious, take the blue pill and move on.

    I’ve put together a list of the mortgage rules so that you can understand what they mean and how they will impact you. Hey, let’s give The Federal govt some credit… they’ve been transparent about a few things, right?:

    They want house prices to drop.
    They don’t want anyone to have a mortgage if their home is worth more than $1,000,000.
    They don’t want you to ever refinance your mortgage. You should only require a mortgage when you buy a house.
    They don’t want you to buy a house and rent it out. You should only buy a rental property if it has 2 or more units.
    Mortgages should not be amortized for longer than 25 years.
    They want rates to go way up.

    Here we go.. Forget the data and stats being reported today. Those stats don’t matter! We want to see the stats after March 30th, 2017.

    Remember the mortgage rule changes of October 17th? How about the ones on November 30th? Get ready, we won’t see the full effect of these changes until after March 30th 2017.

    That’s when the last of the mortgage approvals will have closed, that were done under the old rules. And all the new mortgage closings beyond this date, will have had to been qualified with the new rules. This is when we’ll begin to see the impact of these rules… And we’ll begin to see just how many Canadians will be have been impacted.

    If you think I’m wrong, read the rule changes below and tell me what other conclusions you can come up with.

    RULE CHANGES

    “Stress-test” for hi-ratio mortgages. Borrowers buying with less than 20% down must qualify at the 5 yr posted Fixed rate, currently 4.64%. (this rule has received the most media attention, but this won’t impact that many as several lenders have been using this already).
    “Stress-test for low-ratio mortgages. Pay ATTENTION. This rule affects far more Canadians than just first time homebuyers.. Lenders, Banks, etc have been getting portfolio insurance on mortgages for over a decade… invisible, and at no cost to the client. It allows Lenders to raise money more cheaply, and the end result is lower rates for Canadians. But now, Lenders must put these lower risk mortgages through the same ‘stress-test’. (make sense? of course not!). Here’s the details…

    Purchases and mortgage transfers only. NO REFINANCES allowed. (Yup.. that’s right. Refinancing your mortgage is a bad thing, all of a sudden.)
    25 year amortization maximum.
    Purchase price must be below $1,000,000. If you are buying for more than this amount, and you want even a small mortgage of $100,000 or $200,000, you are going to find many Lenders will increase the interest rate or not offer anything at all. (you are reading this correctly…don’t worry. This is correct. This is how idiotic the new rules are).
    Minimum credit score of 600. (not a big deal as most of us have much higher scores).
    Maximum debt servicing ratios of 39% of your gross income to be used for housing costs (while this may sound ok for most, there are many circumstances where a client has reduced income, temporarily, of is on a pension with lots of equity in the home and just wants to borrow enough to get by for the next 5 or 10 years.. why can’t we allow them to access this money if the Lenders are willing to lend it? Again, this makes no sense and shows how little thought was put into these rules.)
    No rental property mortgages allowed for single family homes. Yup, you read this right. For some unknown reason, the Govt decided that single family homes shouldn’t be rented out and therefore, not qualify for a mortgage. (this has to be the dumbest rule of them all. How many Canadians own a rental property or want to own a rental property? Why does the property have to have 2 units or more to qualify? Somebody pinch me, I’m having a nightmare.!!!)

    THE REAL WORLD…INSIDE MORTGAGE APPROVAL CENTRES

    End result has been chaos since October as Lenders are unclear on how and what the new rules actually mean and how they are to be implemented fully . Qualifying at Bank Posted 5 yr fixed rates isn’t a huge deal as most Canadians qualified on this anyway. The bigger changes are with regards to rental properties, maximum mortgage amounts, limitations based on purchase price, no refinances.. these are bigger issues that will impact all of us.

    MORNEAU… Our Finance Minister talked with the Canadian Mortgage Brokers Association (CMBA) on October 14, 2016… only AFTER they announced the changes. I repeat, AFTER the changes were announced. When asked why CMBA was not consulted, Mr. Morneau just replied that the governments concern for consumer debt load was the reason for quick implementation. Wow, really, that’s it? I’ll repeat, Morneau consulted the CMBA just 3 days prior to the rules coming into effect!! Why bother meeting then? What a farce.

    FUTURE RULES

    Yes, there are even more rule changes proposed..

    LENDER RISK SHARING.. CMHC insures around $500billion in mortgages. Any default by the borrower and loss to the lender, would be payable by CMHC. In theory, the govt is on the hook for any potential losses. However, Experts agree, that any real loss to the tax payer could only result from a very large drop in real estate values. Something we haven’t seen since 1990, and something that isn’t expected to happen.. Even by the most pessimistic.
    INCOME TAX MEASURES… New rules would remove a loophole where a non-resident could own a Canadian home, and sell the home Capital Gains tax-free. Canadians enjoy being able to claim appreciation in their homes without tax (how often can you say that?)

    Here’s another interesting forecast. The Canadian Real Estate Association (CREA) is forecasting for sales to rise by 6.2%. Stay tuned.. if this forecast is accurate, we will see more real estate and mortgage transactions… but tougher mortgage underwriting. Do yourself a favour and speak with an experience Mortgage Broker. Don’t rely on a robot or ‘do it yourself’ mortgage system to guide you. Mortgages have become far more complex than ever before. They continue to evolve. An advisor can help you make the right decision. They won’t tell you what to do, but they can spell out your options and give you unbiased, neutral advice.

    Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

    Here is the link : 更多精彩文章及讨论,请光临枫下论坛 rolia.net
    • 注意这点:For some unknown reason, the Govt decided that single family homes shouldn’t be rented out and therefore, not qualify for a mortgage. +3
    • 假设里面说的都是真的,几点: +3
      • March 30th 2017,没说renew是否受影响。 +1
        That’s when the last of the mortgage approvals will have closed, that were done under the old rules. And all the new mortgage closings beyond this date, will have had to been qualified with the new rules. This is when we’ll begin to see the impact of these rules。
      • NO REFINANCES allowed,这个现在本来就很难了,只看收入了。
      • NO RENTAL PROPERTY MORTGAGES ALLOWED FOR SINGLE FAMILY HOMES. 这个太了吧,真的实施的话,房价立崩90%!
        • 它的意思好像是自主房不能再分租。有好多人自己住一半的房子,把BASEMENT,或其他多余房间出租,这种可能就不行了。这是我的理解,可能有错。
          • "single family homes shouldn’t be rented out and therefore, not qualify for a mortgage. "意思就是单个家庭的房子,比如TH,Semi,House都不容许出租,如果有出租就不能申请房贷。
          • 当然如果房子是多个家庭的就可以申请房贷。这个意思就是经过政府批准的可以住多个家庭的出租屋,比如滑铁卢有政府发的出租执照的那种。 +1
        • They don’t want you to buy a house and rent it out.
        • 是不是不能把出租收入作为收入来申请mortage了? 不然,不making sense.
          • 出租收入可以作为收入申请按揭,不过要打折,具体问一下银行,最近按揭要求变化蛮大的
    • 不错。但是估计大多数土豪读不了这样的英语文章。他们只能依赖经纪。但是经纪不可能告诉土豪真正房市走势的。 +2
      • They don’t want anyone to have a mortgage if their home is worth more than $1,000,000.
    • 哪里看到的啊?
      • They want house prices to drop -- this is debatable +2
        • 理论上讲,没有一个政府希望房市骤然大跌,那会引起一系列灾难性连锁反应,给政府增加压力。但政府也一定不想看到涨的太高的房市,人们负担不起房子,政府压力也很大。在温哥华多伦多这样热的房市下,政府一定想要房市温和下降/软着陆。
          • 正解!!
      • 文章最底下就是 Page LINK.
        • 谢谢,这哥们,是个Mortgage broker. Fix rate 有可能上升,这个我同意他,但他说政府想让房子降,这个真不同意他 +2
          • 没事,每人多有自己的看法,不一定对也不一定错。我觉得他可能认为房价过高,有泡沫,所以说政府想把房价压下来点,不要再猛升。我觉得政府不想房价再猛涨,但也不会让房价狂跌,保持在小范围的涨和跌政府是OK的。个人意见啊。
            • 同意你的看法
            • 天朝说了“稳定”压倒一切,土豆乖乖滴照抄一遍,对土豆来说中文就是仙文哪里抄得好?邯郸学步画虎成猫
              • 政府现在限购限汇限房贷的口号就是:房子不是用来炒的!
                • 每天看新闻联播好了,天天幸福
      • 没有出处,没有comments,无法令人信服。
        • 同意。是个人的post. 不可信。 +1
    • They don’t want you to ever refinance your mortgage. You should only require a mortgage when you buy a house. +1