A Pre-Approval Does Not Guarantee a Mortgage Approval + MORE Apr 28th

Obtaining a mortgage or secured line of credit in Canada at the best rates is often a daunting task. We can help! Read the articles below for more info.

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A Pre-Approval Does Not Guarantee a Mortgage Approval

– canadianmortgagetrends.com

Many Canadians are under the assumption their mortgage is as good as done once they have a mortgage pre-approval. But the truth is a buyer cannot expect a mortgage pre-approval will automatically translate into a mortgage. The lender now needs to consider the property itself, approve all the terms and review the documentation before you transition from pre-approved to approved. Buyers often do not appreciate there is still some uncertainty when it comes to their mortgage. Unfortunately, once in a […]

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New, tougher mortgage stress test? What will this do to our red hot real estate market?

– canadamortgagenews.ca

There is big news that was announced earlier this month and it might affect home buyers in the market for a mortgage. The Office of Superintendent of Financial Institutions (OSFI) released a proposal to increase the qualifying mortgage rate for uninsured mortgages. Uninsured mortgages are ones where there is more than a 20% down payment.

The new qualifying rate will increase from the posted 5 year fixed rate, which is currently 4.79%, to the contract rate plus 2% or 5.25%, whichever is greater. This would effectively qualify consumers for 4% less mortgage. On a $1,000,000 purchase with a $200,000 down payment, buyers would qualify for around $755,000 vs $800,000.

Many are concerned that this could have an effect on our market by slowing it down.

Why is OSFI wanting to tighten requirements?

The reason for the new proposal that will make the underwriting process more strict is simply to protect lenders and banks from taking on extra risk. They claim they are taking “proactive action” to ensure that banks will remain resilient after the pandemic…

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