I have had an ongoing conversation with Jason Dodd of Verico Maximum Mortgages about changes to mortgage financing in the recent past. I've asked him to write a blog to update you on what to expect. It really is time to change our thinking about the process. This is especially for those folks newer to Canada, self employed or any buyer who wants to have the best options, not just those available at the last minute.



From Jason:


While we have enjoyed a very competitive mortgage market and low interest rate environment over the last few years, a slow steady change has happened with mortgage qualification.  Lenders and insurers are under much more scrutiny to adjust qualification standards for all borrowers involved in a real estate transaction.


Only a short time ago we had 40 year amortizations, 100% financed mortgages with best rates, and a host of other options to ease qualification for borrowers.  Although I agree with a lot of the rule changes, in some cases it has tightened the mortgage rope around many buyers that qualification is being affected.


Clients whether new to the market or experienced in buying need to adjust to new parameters set out by both lenders and insurers.  The best way to do that is to shift your view from Pre Approval mode to Mortgage planning mode.  The difference is this, most clients we come across have a one page approval that says you are approved up to a certain dollar value with this interest rate.  Where we see this fail is when an offer goes live and suddenly clients are finding out they don’t qualify for a number of reasons.   Often this comes as a surprise to the buyer and the realtor showing them homes.


A properly planned mortgage strategy would help clients address their qualification up front and deal with any issues before an offer is being made.  Review of all relevant documents that are applicable to each individual applicant, as well as a review of the credit history to make sure it meets lender and insurer standards.  If there are any additional documents that need to be gathered we can also instruct clients to begin preparing them.  Most clients are surprised on the detail that is required to verify the down payment in a transaction as because of regulations in our industry you have to verify the source of funds used in a real estate transaction. 


Lastly clients often are not aware at the different terms, rates, privileges and general fine print that are offered by many lenders.  So clients feel rushed or pressured to take a certain term because they have had little time to prepare or think about different options.  Why not take the time to research this with a broker before an offer is made so you are versed in the debt you are about to take on.  There is a beginning, middle and end to a mortgage so be prepared for all stages of your financing.


- Courtesy of Jason Dodd of Verico Maximum Mortgages - www.jasondodd.ca

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Are increasing home prices in Calgary pushing folks out of single family homes and into townhouses and condos?

From the CREB update: "While conditions are now more balanced, the composition of the single-family market has changed," said Lurie. "One-quarter of year-to-date sales in the sector has been for product priced below $400,000. Last year, it represented 35 per cent of the market share. Two years ago, it accounted for 44 per cent of all single-family sales."


With that the condo market is seeing a larger increase than single family homes: "For the fifth consecutive month, year-over-year condominium apartment sales growth outpaced growth in the single-family sector. Year-to-date condominium apartment sales totaled 3,819, a 21 per cent increase over last year. This compares with a seven per cent increase to 13,842 units in the single-family market over the same time frame."


While some folks are extending themselves to purchase higher value property, many young families are working hard to stay within their means. Surprisingly it is the younger crowd that tells me they are approved to values much higher than their search maximum when buying a new home. They have families to raise, trips to plan and lots of life to live. The current rental market is encouraging many to look at ownership when they look at the numbers but with budgets in hand.


Rent for a 2 bedroom aparment: $1700 per month = $20,400 per year or $102,000 over 5 years.

Typical suburban home: $2400 per month = $28,800 per eyar or $144,000 over 5 years.


Population predictions are expecting Calgary's population to increase by another 500,000 people by 2042. We all have to live somewhere.


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More and more folks are looking to Calgary's west side when looking for a new home. Is it the new LRT, the easy access to all parts of the city, the amenities or the great home options?

You might be checking out the show homes further west, but don't forget to look in Signal Hill as there are some wonderful homes to consider that are at the heart of it all. 


View the Signal Hill Community Profile.

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