Don’t worry, it’s all good.  Well, mostly good if I’m being honest.  But I don’t write bummer blogs because there is no point in whining about something that you can’t change! So despite some tough mortgage lending guidelines changes that are starting to impact the lending and real estate market landscapes, I will focus on what’s good and attainable. Allow me to preface: acquiring a mortgage requires experienced brokers with a vast and varied lending network, especially now, because wow, the guidelines are TIGHT.

So, Hello!

It’s been another minute since we last connected, hasn’t it? When you’re slaying mortgages and listing and buying properties with clients while tearing down your office, packing and relocating and working on a website overhaul (coming soon!), time seriously flies. I need a teleporter. And, a cloning device. A-a-n-d a crystal ball would be great. Note: before the grammar po-po comes at me (and before Word throws another green squiggle under my next sentence suggesting I reconsider the fragment [without ever actually suggesting a grammatically correct revision]), you should know that I’m a fan of using conjunctions to coordinate two independent clauses. Word’s unsolicited grammar recommendation reminds me of the time I got a fortune cookie at Hung Far Low in Portland, Oregon that said ‘You should watch less T.V. and read more’.

That’s not a fortune cookie. That’s an opinion cookie.  I came for the Chop Suey. I left needing a therapist.  Fun Fact:  Hung Far Low was a real restaurant and that was indeed the name.  Quit yer gigglin!  Hung Far Low means ‘almond blossom fragrance’ in Cantonese.  It opened in 1928 and closed in 2015.

Perhaps they should have kept their opinions to themselves.

😉  KIDDING.  I loved that place.

Hung_Far_Low_(5459891293)

 

 

 

 

 

 

 

I digress.

WE’VE MOVED!  Our new office is located at 3850 Steeles Ave, W., in Woodbridge! New and exciting opportunities abound in our new location as we have settled in with Nordale Realty as the in-house mortgage brokerage. In 2011 we started as a mortgage brokerage with sites set primarily on the residential sector. In 2015 we started to build out the real estate business line and by mid 2016 we were in full-on real estate + mortgage financing mode. Now, in 2018 our expansion will continue as we build out our commercial mortgage and real estate service offerings. Fear not! Our primary focus is still on residential mortgages and real estate!  Your Money Matters is the Home of Mortgages and Real Estate (how’s that for word play?  I think it’s a keeper!); we are here for you and because of you, and we will continue offering the lowest mortgage interest rates and real estate services of the highest standard whether you are interested in buying or selling property or arranging financing or refinancing for your future or current residence or commercial property.

Just a quick reminder that we also conduct FREE mortgage evaluations, so if you or someone you know would like us to review a mortgage to see if there is a better product (that will save you money and/or one that offers more flexible terms), TELL THE OTHERS!

MORTGAGE STRESS TEST UPDATE:  By now you’ve likely heard that there have been several changes to mortgage lending guidelines. We first blogged about the Ontario rental and housing reform changes  last June, 2017 and detailed how the Stress Test could have affected you then. Now, as of January 1st, 2018, there are more changes; Canadians obtaining, renewing or refinancing a mortgage will have to prove that they are able to manage with interest rates markedly higher than their contract rate – a qualifying rate of the greater of the contractual mortgage rate plus two percentage points or the five-year benchmark rate published by the Bank of Canada. The existing stress test (which came into effect last year) already requires those with insured mortgages (less than  20% down payment) to qualify at the Bank of Canada benchmark five-year mortgage rule.  In other words, whether you have 5%, 10%, 15% or 20%+ as a down payment, you will be subjected to the Stress Test.

I’d be remiss if at this point I didn’t mention that it is a misconception that those that already own a home and that have a mortgage and plenty of equity will not be subjected to the Stress Test. Unfortunately, or fortunately, depending on your perspective, whether applicants would like a small equity line of credit or to simply consolidate high interest rate credit cards with their mortgage (aka ‘refinance’), all applicants – whether buying and needing a mortgage or wanting to refinance an existing mortgage – will now be subjected to the Stress Test.

Therefore many people will not qualify to include their credit card debt with their mortgage even though they have a lot of equity in their home.

Wait!  What?  Hold up!  It doesn’t seem to make sense, does it?  It doesn’t seem … fair.  When someone buys a home, it is not just a box to live in, or as the brilliant and hilarious George Carlin said ‘a place to put your stuff.’  It is security.  It is an investment.  We buy into the notion of home ownership being all of these things, and more.  We buy into the idea of putting money away i.e. building equity.  We trust that real estate is a solid asset that appreciates in value and that we can tap into that value, that equity, if needs be.

So, how is possible that one can afford to pay upwards of 20% interest on their credit card debt but that same person doesn’t qualify to add it to their mortgage at 3%?

The reason for this is because credit cards and unsecured lines of credit are not subject to the same regulations.

Currently, our finance minister is overly concerned about Canadians’ ability to repay their mortgages that have 3%-5% interest rates, but there are no regulations in place to curb credit card approvals that offer, say, 18% interest rates or unsecured lines of credit that carry 6%-12% interest rates.

Read that again. I’ll wait. No problem.  Because I reread it myself and I wrote it.

A-a-a-n-d, crickets.

As such, some brokers are experiencing borrower rejection rates as high as 20% from large banks and traditional monoline lenders (such as First National, RMG, Street Capital, and Merix Financial, which are lenders that focus on mortgages only). As a result, some brokers are increasingly directing clients toward alternative lenders.  Before calling up your mortgage broker and suggesting, strongly, that you need a first and a second mortgage and/or to be taken to an alternative lender, B lender or to a Private lender or to a credit union, please do yourself a solid and call us.  #YourMoneyMatters. Like never before.

Luxurious Living Room in new home

Ottawa has already moved to tighten the rules around the mortgage market several times since 2008 with a series of regulatory tweaks intending to limit the amount of debt that Canadians and financial institutions take on.  Arguably (or, not so much), the operative word is ‘intending’.  The new guidelines are the latest turn of the screw — and will likely have a big impact on real estate markets and brokerages, mortgage brokerages, banks, insurance companies, construction companies, consumers and the Canadian economyCrazy Factoid: Real estate, construction and related financial and insurance industries were together responsible for more than 20 per cent of Canada’s GDP in 2017, according to a quarterly report released by Statistics Canada March 2.  But if you include industries associated with real estate like construction of new homes, home renovations, and the purchase of essential appliances for a new home, that number is higher still.

This reminds me of the time (6 days ago) when I read that the price tag for the creation of this new logo

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was $650,000.00.  Sure, it includes branding strategy and guidelines and marketing, but srsly, were they high?  At least a half a mil of that could have been used for, say, oh I don’t know, four wind turbines.  Don’t get me wrong, I have no problem with dispensing the cheeba for medicinal purposes … but the officials that are spending exorbitant amounts of money on basic line drawings are essentially the same officials (just a different dept) that are telling Canadian citizens that they are afraid that we may not be able to pay our debts if interest rates rise by 2% over the next few years.  Uhm …

Oh well, as Greg Campagna (1057EzRock) tweeted, “Don’t worry.  We’ll make that back in the first 3 min”. #OCS

Again, I digress.  Where were we?  Ah yes, mortgage lending guidelines and such.

Did you know that the transactional costs of buying and selling homes makes up almost 2 percent of Canada’s economy?  Wot?  I knowah? That’s a pretty stunning figure, more so when you take into account that agriculture, forestry, fishing and hunting combined only made up 1.6 percent of Canada’s GDP between May 2016 and May 2017.

Notwithstanding opinionated cookies, overpriced signage and governmental interventions by not-so-cautiously optimistic blowhards (did that sound bitter? :), I hope that one of your takeaways from this blog is that even though the Stress Test might be causing stress across the board, we are registered with several different types of lenders that offer different mortgage products, rates and terms and that means that we will continue offering mortgage products with the lowest rates and best terms, just as we always have. We are registered with the so-called ‘big’ banks and with various ‘alternative’ lenders, ‘A’ and ‘Alt-A’ lenders, ‘B’ lenders and ‘Private’ lenders and our broker-only network is vast and varied and ensures that we will find the most suitable mortgage products for our clients.  Changes, schmanges.  We got you!  (Grammarly, be damned!) 

We pride ourselves on streamlining processes that are getting more and more difficult for consumers to navigate on their own.  Clients have referred to our approach to locking in real estate + mortgage financing as ‘holistic’, a ‘one-stop-shop’, ‘everything you need under one roof’ and we couldn’t be happier!  Check out these real testimonials (if you would like to check the veracity of any testimonials,  please let me know – I’m happy to connect you!)

One of my favorite human’s ever, Cindy Pratt, of Keswick, ON. wrote to us:

“Thank you to Roy Perreault and John Avvenente for all your hard work & effort during the most stressful time of our home ownership.  I can’t recommend this dynamic duo enough!  The fact that they went WAY above & beyond to sell our home in an extremely unpredictable market made us feel we made the absolute right decision going with them!  Whether your needs be financial assistance or buying/selling a home, trust that these two are the BEST men for the job!  Thank you just doesn’t cut it!!

Joshua Luksa, owner of the AHMAZING Geekpower in Newmarket, ON, wrote:

“John, Roy and the other staff there were incredible. Amazing job working a nearly million dollar mortgage broken over 2 separate properties. Very thorough, helped me out along the way and got me an amazing rate, well below the posted market rates of all the banks. I cant say enough about them!”

Gerald Reinink, the extraordinary artist and businessman, owner of the mind-blowing HD Threshing Floor Furniture in Cambridge , ON. wrote:

Have worked several times with Roy and John on my mortgage & real estate and enjoyed every time. Very friendly , courteous and above all, extremely good at what they do!

 (Don’t stop it)

There are so many mortgage products and options available for homeowners and potential homeowners that it’s difficult to know where to start, where to go, who to trust.  Feel free to pass along our contact information to your family and friends.  You can rest assured that they’re in great hands.

The thing is, when you’re a homeowner you are no longer paying someone else’s mortgage and you are building equity (money in the bank), and investing in your future. Investing in real estate still is one of the best, arguably the best investment that one can make IMHO. It may be more difficult to qualify for the loan amount that you would have qualified for last year, but there are several options still available.  That will be the topic of my next blog.  Stay close.  It’s going to be an eye-opener.

So spring is around the corner. Yes!  New shoes!  Wait.  Wrong blog …

Investing in property is one thing.  Reinvesting in your property is quite another by way of maintenance and renovations and is always advisable when timing is right, when scheduling permits and finances allow. If you are ready to renovate but you’re not sure how to best finance it right now, let’s talk about refinancing your existing mortgage – it could be the answer and we will help you take your investment to the next level in the most sensible, affordable way.

I hope this helps.  Thanks for reading guys!

Are you ready for spring?  Home Maintenance and Repair Tips are over here.

Until next time …

Roy Perreault

Operations Manager

The Mortgage Centre – Your Money Matters.

Your Money Matters Inc., is an independently owned and operated, award winning mortgage brokerage with the unique distinction of being dually licensed to broker both mortgages and real estate. We have complete visibility across the mortgage lending and real estate landscapes which allows us to swiftly, accurately and transparently negotiate and facilitate every mortgage financing and real estate transaction for you.  Buying or selling real estate and obtaining mortgage financing is not a one-size-fits-all proposition, but we are, because your family, your home and Your Money Matters. POW!
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