Mortgage rules seem to be ever changing, evolving some could say. Unless you are thrown directly into the mortgage world it can sometimes be hard to keep up. Below is a list of the most recent mortgage changes. Make sure if you ever have a question, big or small, to give us a call.
Lines of Credit:
Before: We would use the interest only payment of your interest only Line of Credit.
Now: We now have to calculate your payments using 3% of the balance. For a secured line of credit they will base a payment on the balance amortized over 25 years. Some lenders are even calculating your payment off of the limit available, even if you have a zero balance.
Gifted Down Payment:
Before: A letter with the giftor’s information. Such as their names, address and signatures.
Now: Some lenders might want to see where the money is coming from or ask for a letter from the giftors bank.
Before: Some lenders but not all would require an appraisal. If the lender asked for the appraisal (not the insurer ie: CMHC, Canada Guarantor & Genworth) then this will be a cost to you.
Now: More and more lenders are now asking for appraisals and if not an appraisal, sometimes the home inspection.
Before: All insurers would accept rental income from any type of suite.
Now: CMHC will only include rental income from a suite if it is a legal suite. Genworth and Canada Guaranty will still accept rental income from any type of suite.
Before: All heat was factored at a standard rate of $100.
Now: Heat is now calculated from a formula based on the square footage in the house.
Before: If you are commission based, work overtime or get an annual bonus lenders have always wanted to see a 2 year average from your Notice of Assessments.
Now: If the income is descending in those two years of Notice of Assessments, we have to use the lowest amount.
Before: A guarantor income could be included in the application to help the applicant qualify. The guarantor didn’t have to be a spouse or common law partner.
Now: If you want to include the guarantors income then they must be a spouse or common law partner. If you don’t need to include the guarantors income then it doesn’t have to a spouse or common law partner.