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Industry Changes In Effect .....

So there are some industry changes that do effect you. Whether you want to purchase, refinance or transfer, these changes directly affect your qualification for home ownership.

As I mentioned May 1st, 2013 in the blog post "Interesting Updates for Mortgage & Eye Openers to Qualification" there have indeed been changes to how revolving debt is looked at on a mortgage application. I just received an email from First National confirming two changes that are affective immediately with them for certain.

1) Unsecured Revolving Credit-  Affective immediately, the monthly payment for all revolving unsecured credit will be 3% of the outstanding balance. Interest payments will no longer be used to qualify.  
IE. Credit Card Balance of $11,000, will have a $330/month payment used when qualifying.

*Now most lenders have taken this on already, so it is not that much of a surprise. However the next one will take some getting use to, with First National - and if they are doing it the other lenders are eventually going to follow suit, if not already put into action. *

2) Secured Revolving Credit - First National will take 4.6% of the LIMIT on the Line of Credit over a 12 month period, regardless of the balance owing. The Line of Credit must be secured against the property, and proof will be required of this - so the Line of Credit Statement will also be used as confirmation. 
Example: $300,000 Line of credit, payment would be $1150/month
The math for this was $300,000 x 0.46% = $13,800/12 months = $1150/month   

I do believe that all the lenders are eventually going to be on this model, well #1 is already standard with the lenders, but the 2ed one I think will be coming to them all soon. There is a silver lining, well a few:

1) Rates are still really low - so if you are doing anything mortgage wise you can lock in for great 5 and 10 year rates. 10 year being the safer bet! And at 3.69% it is pretty awesome! 

2) It you are conventional we can still do 30 year amortizations, which can help with qualifications as well

3) and the best point, if you have a licensed Mortgage Agent you are working with he/she can show you how to best achieve your mortgage/home ownership goals. Ask questions? Check out your options? I know for myself, if I can not get the client to qualify - I tell them how they can qualify, with tips and things to do to help put them into a better position for next time. 

There are still a lot of options out there & some amazing mortgage products. Realizing your dreams of Home Ownership or changing your mortgage etc, what ever the situation is - there are still solutions, and good ones. But in these days it pays to be informed and to not follow blindly in any directions. Get all the facts and decide what will best work for you, and will work for you long term. For a majority of Canadians Mortgages are not short term solutions... and you need to look at them that way! It plays true in regards to rate : the lowest rate out there is not always the best solution, and everyone has to start thinking "bigger picture". 

Talk to a mortgage professional today, like myself, to get your best options :)

Ariana Leroux
Licensed Mortgage Agent 
w/The Mortgage Group AB
Leroux Mortgages
P:780.952.4087
TFF: 877.489.8126
W: mortgages@arianaleroux.com
E: www.arianaleroux.com







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