Mortgage Rules Change Again (Slightly)

You know when you’re driving along and suddenly out of no where you get t-boned by a mack truck? That’s sort of how I felt when I read this headline:


However as I emerged from my dizzy state I then read further and realize “meh, nothing big here”

1. No More Self-Employed Without Income Under CMHC

This is the biggest change of the two. However in reality it’s not that major. Here’s why: CMHC requires a self-employed borrower who cannot prove income to be self-employed for more than 2 years and less than 3 years. It’s like fitting a locomotive through a mouse hole. I don’t recall the last CMHC self-employed approval I received due to this incredibly tight loophole.

Why this isn’t a big deal: It’s not a big deal because Genworth still carries a self-employed stated-income program with 10% down, and can be 3 or more years experience.

No More Secondary Homes With 5% Down

‚ÄčThe “Secondary Home Program” was quite popular amongst people who wanted to get around the 20%-rule for rental properties. Whether right or wrong it happened too frequently and now that this program has finished, investors will still need to have 20% down.

Why this isn’t a big deal: it’s not a big deal because without using rental income, most investors couldn’t qualify at 5% down anyways.

Now let me finish off by saying this: Working with a mortgage broker is going to be increasingly important for your business now more than ever. I can help you navigate each deal, place it, and sell it to the client. Your local bank does not have access to:

-credit unions (who can do rentals at 80% using gross income)
-alternative lenders (who can do up to 90% using…


How Do I Get Paid?

I met with two young first-time buyers who were eager to get the ball rolling on their home purchase. First things first was to get them pre-approved which meant we met at a local Starbucks to discuss the fine nuances of mortgage financing options. Towards the end they both asked me straight up “Ok, so how do you get paid? How much do we owe you for this?”. A great question - one that I’d like to explain here as I did to them.

I only get paid if and when I close a deal. I don’t get paid for my time to meet people before they buy something, nor to discuss a multiple-offer situation with them when it’s 7pm a rainy Tuesday, or to help them understand their options on an early morning Sunday. When the deal is closed is when I get paid by the lender. Depending on the term the client picks, I get paid more or less. The shorter the term, the less I get paid since the lender has the client for a shorter amount of time.

Why is this important? I believe that we have entered a new era of information flow. I experience it myself when surfing the web - our attention spans are very short, our patience is thin, but our lust and appetite for knowledge is growing. Did you know that there is a myth out there we only use 10% of our brain? It’s been de-bunked but surely we don’t use the full 100%. I find there is always more space to know more about something. Back on topic: I am finding that many people have commoditized the idea behind a mortgage. Because of the web, people believe it’s a simple process, a one-stop-shop, or something that shouldn’t take…


How I Saved My Client $19643

Recently a client we will call Jack called me in a panic. His multi-national company was offering him a glamorous opportunity to work in the far east, on a permanent full-time basis. This was just the opportunity he was working for and finally the call came, very unexpectedly.  Jack had bought a home with his wife less than 1 year ago and took a 5-year fixed mortgage at 2.84%, so obviously did not plan to be making a global move of this kind anytime soon. When I first met Jack he raved about his experience with one of the big banks, and wanted assurance that the lender or bank we picked for him would be as good, if not better. After a couple of meetings and many emails, we settled on a great lender, CMLS Financial, who offered us a fantastic rate and even better terms *& conditions.

Here is how we managed to save $19, 643 today, by picking the right lender:

Had Jack gone with one of the big banks who use a “Posted-Rate Penalty Calculation” method when assessing the Interest Rate Differential to break a fixed-term mortgage, his penalty would have been an astounding $22 675. Even though interest rates are only 25 basis points higher, or .25%, (2.84 to 3.09 today), his penalty would have still been this high since this bank uses a posted rate, which today is 4.99%. What is Jack’s actual penalty to break his much better mortgage?


That’s right. 3-months interest penalty. Since this lender uses a much more equitable way of calculating the true cost of breaking his term this early, they are only charging him what is in writing - 3 months interest. Why? Well simply put, they compare rate to rate, not posted rate to rate.…

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