RECAP of 2014 Financing Changes
January 12 2015 Posted by Mary Poburan
Now that we are well into 2015, I thought it prudent to recap some of the changes in 2014 that are now fully in force. Remember, that as a broker I have access to variety of lenders and although my intention is to always provide BEST RATE, the reason you should deal with ME is because you will have the best chance of success. Here are just some of the changes:
-We now have to factor debt repayment differently for all clients who hold an interest only Heloc or line of credit. This will be a HUGE CHANGE for many applicants. It means that a 300K heloc that used to carry interest only payments of 875.00 will now have a payment factored for debt load of 1709.00 mnth based on new rules.
-CMHC will no longer insure more than one property…period. It is critical that clients who may have a previously insured home, work with a lender who uses one of the other insurers( no changes made to their policy).
-CHMC has also removed their stated income policy for Self employed clients. If you are self-employed and have income that is not verified by tax documents,your only option is now through one of the other insurers. Many lenders no longer offer this product at all clients need to ensure the right lender is looking at their file.
-A small but possibly powerful change is the calculation of heat factor. As a rule we used to use a hypothetical factor of 85.00 a month for calculation of GDS( debt calculation) however now each lender has their own requirement based on actual heating costs or square footage. At a minimum this will increase most calculations to at least 100-125 a month which in some cases will affect a client’s borrowing capacity.
Knowledge is Power so if there is a way to get the deal done…I am the one to find it!!
Mary Poburan
Senior Mortgage Consultant

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