A flurry of emails and updates have been coming through from various lenders updating the mortgage broker channel on the new world of mortgages. If you thought mortgages were simple in the past and are a commodity, think again! Here is a breakdown of some different factors to consider for mortgage products pricing:
- Is loan to value below or above 75%? Different rates
- Is this a purchase, refinance or renewal? Each option has a different mortgage rate
- Are you buying a single unit investment property? Good luck, many lenders no longer finance single units such as condos or single family homes
- Are buying an investment property with 2-4 units? Options exist with a few lenders
- Are you renewing or refinancing an investment property? You are out of luck, only a handful of lenders will provide a mortgage
- Want a 30 year amortization? A premium will be added to your mortgage rate
- Are you putting down less than 20% to buy a home? Congrats, you will get the best rate
- Is your credit below 680? There are loan to value restrictions for refinancing
- Buying a property over a million? Very few lenders will finance the property
- Looking to refinance to 30 year amortization for better cash flow? Good luck, not many lenders will go to 30 years for refinances
I needed a few breaks reading the updated lenders guidelines, mortgage rates and products today.
Here is where I can't make sense out of these changes; a buyer putting 5% for their first home gets a rate 0.2% lower than someone who is buying a home with 20% downpayment. How can someone who has more "skin" in the game pay a higher interest rate than a buyer with the minimum amount to buy a home! Where is the common sense?
Which begs the question: Do Ottawa's bureaucrats and policy makers consult with industry and people on the ground to understand the outcomes of their policies? I can tell you the answer is NO!
It is a new era in the world of mortgage financing and it is more imperative than ever to work with a mortgage broker who can help you navigate through the maze of mortgages.