It’s a been a while since CMHC mortgage lending rules have been ramped back to more historical levels.
After dabbling in American style 40 year zero down mortgages we decided that might not be the best idea. Unfortunately we never did get the American style locked in interest rate for the full duration of the loan.
So now we’re back to 25 year terms and it’s more difficult to get a loan if you’re self employed. A lot of loan applications that would have been approved a year or two ago are now being rejected.
So what affect has this had on the market so far?
Well apparently the sub-prime lending market in Canada has rocketed to a record level for one.
Capital Corp is a non-bank lender that has been operating since 1988. Their chief executive Eli Dadouch says there’s a lot of money out there for non-bank loans to higher risk borrowers.
He said there is no question it’s the top of the real estate cycle, so anybody lending out money has to be more careful today.
“People always want to deal with a bank, it’s the cheapest form of money,” he said. “When they come to us and people like us, it is because there is some type of story [behind why they can’t get credit]. It’s easy to lend money, the talent in this business is getting it back.”
Read the full article in the Financial Post.
One of the great things about the Vancouver housing market is that we don’t have subprime lending. All of our loans are rock solid and even if they weren’t guaranteed by the government banks would still be eager to hand out the same mortgages.
If there’s one thing Vancouverites know, it’s that saving money is difficult.
So what are you to do as a responsible first time home buyer who is unable to save up the hefty 5% required to get a CMHC insured mortgage?
Don’t worry, at least one bank has your back: Vancity will match half your downpayment savings on a home priced under $500k.
Still that’s not exactly zero down, since the CMHC scrapped that in 2008, but if saving up 2.5% is still too difficult you may have other options.
But remember, unless you have a poor credit rating this still isn’t subprime.
Apparently it’s gotten harder to get the long term zero down mortgage the CMHC made available in the past, but not impossible.
It’s the end of another work week and that means it time for the free-for-all! This is our regular weekend news roundup and open topic discussion thread. Here are a few recent links to kick off the chat:
–Tiptoeing towards sub-prime
–Get ready for more bidding wars!
–Carney hints at rate hikes
–Is Carney actually driving?
–Vancouver might get a new tower
–Want to RE blog for G&M?
–Higher learning in Whistler
–Translink puts on the brakes
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!