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Mortgage Broker News | 20 Feb 2014, 10:27 AM Agree 0
Tightened lending guidelines are particularly affecting one type of homebuyer in major cities, according to one broker.
  • Lior | 20 Feb 2014, 02:11 PM Agree 0
    The developer does not really care how the buyer comes up with the money once the purchase agreement is signed. The consumer pays the down payment to the developer and once the building is registered and they have to finalize the mortgage, they find that they no longer meet the lender's underwriting criteria (big problem for those who are self-employed). To compound the problem, several alternative lenders who can be used as back-up are already maxed out in terms of exposure in certain buildings which means buyer has to go to private lender for the 1st. Not an easy pill to swallow but it is better than losing out 100k or more deposit. If a mortgage can't be secure, not only does the developer keep the deposit but it also collects the appreciation value of the unit compared to the price when it was sold pre-construction.
  • Paolo Di Petta | | 20 Feb 2014, 04:49 PM Agree 0
    Historically, most condos in Toronto (with some exceptions, of course) have been marketed towards vulnerable sectors of the market - Lower Income Earners, First Time Homebuyers, Investors. That's one of the reasons why I've always evaluated it at a high risk level, potentially the part of our market that will take everything back down with it.

    There's a bunch of issues that are all starting to pile up, eventually it's going to buckle under the pressure. Especially as completions roll in over the next few months. I guess we'll have to wait and see, but I wouldn't put my money on condos, that's for sure.
  • Broker | 20 Feb 2014, 06:25 PM Agree 0
    Hmmmmmm...... Sounds like an opportunity if you ask me. If a client cannot close, I'm sure there are people out there who would step up and help out to get these folks out of a jam. I'd personally be prepared to take a condo off someone's hands if they can't close.
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