Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Notify me of new replies via email
Mortgage Broker News | 06 May 2015, 06:54 AM Agree 0
Tightening mortgage rules are supported by 80 per cent of Canadians according to a new poll for the Globe and Mail.
  • Tony Piattelli | 06 May 2015, 09:07 AM Agree 0
    What I find amazing is that they poll people who really don't understand how these rule changes will impact them especially their ability to refinance at maturity, because many of them won't qualify to support their current debt structure, hence unable to transfer to another lender and are trapped. I'm sure you'll get the same support for the tightening of the rules
  • John W | 06 May 2015, 10:13 AM Agree 0
    I'm sure they didn't give them any examples of how ridiculous some of the tightened policies are. Had a client who went back to school and got his MBA and has a $50,000 Student line of credit. I can't get him approved because they have to use a $1500/mth payment on the line instead of $250. I'm sure if they polled people on if they supported this the number would be under 20%. I wouldn't be surprised if the people who made the policy aren't aware they are punishing graduates this way.
  • Tony Piattelli | 06 May 2015, 10:17 AM Agree 0
    It's not just the new graduates who are going to get clobbered with these new rules. Pretty well anybody who has a $30,000 unsecured line of credit will be negatively impacted unless they make over $100,000/year as the $900 required payment represents 11% of their gross income so if they were approved with a 38% tds using interest only, they'll be at 49% upon renewal and that's if rates stay were they are. Where are they going to go at maturity if they don't like the rates being offered to them? They won't qualify anymore for the debt they currently have. Nice!
  • Michael I. | 06 May 2015, 12:11 PM Agree 0
    @johnw, you must not have good connections, because some lenders will use 1% of balance on student lines of credit as long as you can prove it is a student line, high-ratio or conventional.
  • John W | 06 May 2015, 12:54 PM Agree 0
    Thanks Michael, I'll do some research on that.
  • Michael I. | 06 May 2015, 12:56 PM Agree 0
    Canadiana does.

    HR or conventional.

    Prove to them it's a student loc they'll use 1%.
  • Julie | 06 May 2015, 03:02 PM Agree 0
    The poll is ridiculous. Tightening rules means that more people will be declined for mortgages or refinances. This especially affects business owners, nowdays the banks don't want to qualify self employed clients. The rules also affect young couples who have a hard time coming up with downpayments, as well as people who make less than $60 000 annually. Basically more people will be rejected and have to keep on renting. Keep in mind that these rules are enfoced by the government organization FSCO not the lenders, meaning that the government is controlling the banks who are forced to follow those rules. Pretty soon only the wealthy will be able to afford a home and the rest of the population which is the majority will not be able to afford a home. It is not a good situation and tightening the rules only means that it is going to be even harder for future generations, our children will not be able to own a home for a very long time-unless they make a lot of money, however for the average hard working citizen it will only be a dream, a lot like in the communist countries.
  • Jake Abramowicz | 06 May 2015, 04:36 PM Agree 0
    The comments here are rather self-serving. Of course no mortgage broker wants to see mortgage rule changes because of the effects on OUR business. That being said if you see the forest from the trees you'll note that tighter rules would mean the less likelihood of a market correction, of an insatiable appetite for debt, and in the long-term a better economic picture for us as a whole, not just us as brokers. The complaints I read here are silly. Oh no! An MBA grad can't qualify for a loan! For too long people have relied on equity going up to refinance, and for an easy entrance into the market and look where it has gotten us: $900K semis in toronto without parking (just to start).

    Not everyone should own, not everyone has a right to own. Owning is a responsibility we should bear on our own but in reality it's everyone's burden if things correct.

    Other markets (Sweden, US in some cases) mandate 20% down or more now - and some of them have rebounded quite well.

    It's not the end of the world if rules change - have done 6x already - market hasn't shifted - so just relax and identify opportunity IF they do. My 2 bps.
  • Ron Butler | 06 May 2015, 04:59 PM Agree 0
    Lior makes a point, these low rates drive the sale of the $990 semi with no parking in Toronto so if the government cannot increase interest rates for a variety of reasons why not tinker a bit.
  • Jake Abramowicz | 06 May 2015, 05:01 PM Agree 0
    I'm not Lior @ronbutler


  • Ron Butler | 06 May 2015, 05:02 PM Agree 0
    Same Brokerage, but you are right not interchangeable. Good point anyway.
Post a reply