Canada housing market bear up against doom sayers – Trends to chase

Screen Shot 2013-04-29 at 10.28.00 AMThe banking regulator of Canada is mulling another tightening of the mortgage rules. An eminent spokesman of the Office of the Superintendent of Financial Institutions has reportedly said that they’re considering some tough rules that would restrain the banks from issuing any mortgages that carry amortization period of more than 25 years. Presently, the lenders in Canada offer mortgages for as long as 35 years when the borrower boasts of a stellar credit rating and a substantial down payment. OSFI told Canadian Mortgage Trends that they’re doing some initial consultation with the financial institutions and some other mortgage lenders on this issue. Given the current condition of the Canadian housing market, there is a need of some changes so as to reduce the total amount of household indebtedness and the number of foreclosures.

2012 was a year in review – Some noteworthy changes to the mortgage financing rules

In the month of June, the Finance Minister of Canada happened to announce the 4th cycle of alteration to the mortgage financing rules and they’re continuing to squeeze the investors, the borrowers, the lenders and the entire industry alike. As per the CAAMP or the Canadian Association of Accredited Mortgage Professionals, such changes are probably going to affect the entire economy. The key change, as mentioned above is related to the cap of the amortization period at 25 years. For all those real estate investors who are looking forward to invest their dollars will also be subject to certain changes in 2013. The lenders will demand the self-employed borrowers to pay down an amount of 35% of the total loan balance and this trend will continue throughout 2013.

Mortgage market trends to chase in 2013 – A guide for the investors

  • Market correction in the Canadian market: There’s a word about a possible bust in the real estate market and the news headlines point at the sudden rise in the level of household debt in Canada, that are adding to the level of concerns. According to reports, the Canadian real estate market isn’t going to have a severe crash as the quality of debt carried by people is much different here. The Canadian Association of Mortgage Professionals report that about 70-80% of the Americans invested in variable rate mortgages and this will rather indicate a stable housing market.
  • Strategic mortgage changes: The investors will experience greater challenges while qualifying    for a mortgage loan in 2013 as there will be a noticeable change in the down payment required to snag a mortgage deal and the qualifying terms will also become more stringent. The equity programs will require 35% of the loan amount as the down payment. Securing a mortgage deal will therefore become difficult with the new mortgage trends.
  • Lease agreement for investment properties: In 2013, lease agreements will be required while financing the investment properties as more an more lenders are demanding lease agreements before the completion of financing. For investors, you can ask your realtor to obtain copies of the present tenancy agreements as this will reduce the complications throughout the track.

Securing financing for your homes in Canada will continue to be more stringent and tough after the new financing rules coming into effect. Get in touch with a myself to take the best decisions in the market.

This article is a contribution from  http://www.mortgagecases.com/

4 Credit Score Myths Busted

Your credit score is a three-digit number ranging from 300-900 that tells future lenders how risky it is to lend you money based on your history of making debt payments.

There are many misconceptions about what it takes to keep your score high. Henrietta Ross, the CEO of the Canadian Association of Credit (CACCS) to help us sort fact from fiction:

Myth 1: You must use major credit cards to build a good score.

Truth: If you’re unable to obtain a major credit card, there are other ways to build your credit history. Making regular payments on installment loans such as a car lease can positively affect your score, as do department-store cards and secure credit cards, which require a cash deposit in the amount of the credit limit.

Myth 2: You can’t make up for mistakes such as late payments.

Truth: It takes time, but your credit will become positive as you build consistency with timely payments, Ross says. How much time it will take depends on a number of factors, including how long the ‘late payment’ has been on your record and how long you’ve had the debt.

Myth 3: Paying cash boosts your score.

Truth: You need to use credit in order to demonstrate your ability to make payments. Using credit at least once every 30 days and making payments on time will keep you in good standing, says Ross.

Myth 4: I will not qualify for a mortgage if I’ve had a poor credit score.

Truth: Lenders look at your entire financial picture, including your

review your housing expense-to-income ratio, which is a comparison of your expected monthly mortgage payment with your gross monthly income.

For more information about how your credit score will affect your mortgage, please contact Darren at 604.818.9262!