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Mortgage Broker News | 08 Apr 2015, 11:10 AM Agree 0
One broker believes clients now putting less than 10 per cent down will be more overleveraged than those who purchased with zero down.
  • | 08 Apr 2015, 01:11 PM Agree 0
    So do you want the insurers to eliminate the 5% down program or make the client/buyer come up with the extra cash?
  • Debbie | 08 Apr 2015, 01:24 PM Agree 0
    Elimination and forcing the client to come up with the extra cash are the same thing, if you can come up with the fees outside of the mortgage you might as well come up with 10%. It will greatly hurt many peoples chances of home ownership. 5% down is a good program, risk is a fact of life, get over it!!! Increasing premiums isn't going to eliminate any of the risk, its just a new tax grab. 5% down buyers know there will be no equity for a very long time, and if mortgage associates (including banks) are explaining things properly, they should be telling clients that refinance will not be an option, or if they plan on selling in a year or two, they will actually lose money. After that, anything can happen in someones life, we can't and shouldn't try to predict or foresee it. We are doing the best we can for the buyer and the lender at this time and date.
  • Bob | 08 Apr 2015, 03:21 PM Agree 0
    Eliminate cash back/borrowed funds as a down payment option. Over leveraged clients will have great difficulty to sell or transfer mortgage if the market takes a downturn. If you have no skin in the game its very easy to walk away with a no recourse mortgage
  • Gary | 08 Apr 2015, 03:58 PM Agree 0
    It appears that the Feds have forgotten what CMHC was originally designed/created help Canadians get into home ownership. With the changes made by the previous Finance Minister, and the constant increase in premiums, the original purpose of CMHC's existence seems to be rapidly eroding.
  • Debbie | 08 Apr 2015, 04:16 PM Agree 0
    I agree Gary, CMHC should be able to take the good with the bad. If you can't take the heat, get out of the kitchen...
    They were real happy to take the premiums for purchases when there was 0 down, stated income. Huge premiums made on those deals. How high is the delinquency rate on all of those mortgages?
    No skin in the game pertains to people that purchased investments with 5% down, they don't mind walking away from a rental, nobody is that flippant on their own home.
  • Bob | 08 Apr 2015, 05:21 PM Agree 0
    Debbie tell that to the people (some of my friends) who walked away from their homes in the 80s when their rates skyrocketed and they couldnt keep their homes in Alberta because of the payments.
  • Debbie | 08 Apr 2015, 06:38 PM Agree 0
    Hey Bob, that wasn't anything to do with an insured mortgage or not. In fact when that happened there was no such thing as 5% down at all.
    Those people could have been walking away from a home with 50% equity. That even validates further my point about why people walk away from a mortgage, it has nothing to do with how much skin in the deal they have. BTW it happened in BC too!
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