TIGHTER MORTGAGE RULES
Too many articles this week about possible changes coming from the Minister of Finance, Jim Flaherty, on budget day March 4th. Globe and Mail and CTV.ca Where there’s smoke, there’s fire… or at least there is some serious consideration being given to changes in mortgage lending. If you’re a first time homebuyer that’s looking to buy this year, you may want to get your mortgage preapproved sooner than later… talk to your Mortgage Broker.
HIGHER HOME SALES AND HIGHER HOUSE PRICES
And how about the effect of CREA making the MLS public or more accessible? Will this affect house prices? Some think it will fuel house price increases…. Read this article from the Financial Post.
Here’s an article from The Star that shouts out ‘home sales skyrocket 87%’. Wow, that’s a scary number…And here’s another article from The Star that paints a clearer picture… ‘Some encouraging news and numbers’ they say…it can be confusing … but here’s an article with a good graph from The Financial Post .. look at the figures.. we are still below pre-recession figures… January 2010 sales were about the same as January 2008 sales.. maybe the market isn’t on fire, maybe it’s just active?
Lots of talk about the MLS being challenged to go public or at least become more accessible…. Currently, it’s only available through members. The Competition Bureau is concerned it may be a monopoly. … read more in the Globe and Mail. There is talk of a $400 flat fee offer to list your home.
We all want to save money, but be careful…. there is a saying..’You get what you pay for’.
There is also concern that a potentially cheaper MLS will drive house prices higher…. Globe and Mail.
Article from Globe and Mail…There has been a lot of pressure on the Canadian Real Estate Association to make the Multiple Listing Service (MLS) more accessible. The Competition Bureau says Agents that want to charge a flat-fee are being excluded from MLS. The Competition Bureau says this restricts competition.
This could be the case of winning the battle but losing the war. A good realtor is someone that can give you the background information about a neighborhood. All those little things that we forget to ask during the frenzy of negotiating an offer and a mortgage.
Your realtor should be able to tell you about the schools, the local businesses, crime and safety issues, industry concerns, etc. This is where the true value of a realtor comes in to play. But I also like freedom of choice… perhaps there is a compromise.
It would be a shame to see a realtor’s services diminished because their incomes go down… An interesting subject for discussion…
Last December, there was a report by CTV that the Federal Government was considering making some changes to mortgage rules if he saw evidence of a housing bubble. These included increasing the minimum down payment from 5% to 10% and shortening maximum amortizations to 30 years from 35.
Today, the Globe and Mail reported Jim Flaherty, the Minister of Finance, has no plans to tighten Canadian Mortgage Rules. He sees no evidence of a housing bubble. The article goes on to say, the Big Six Banks have been putting some pressure on the Government to tighten mortgage rules. Are you paying attention Mr. or Ms. Homeowner? This could affect the value of your home.
Anything that makes is tougher for buyer’s to qualify for a mortgage will reduce housing sales and this ultimately will affect the value of real estate. But probably the bigger and unwelcome effect is that it will make owning a home more difficult for first time homebuyers.
Let’s not forget that our government took action in October 2008 by reducing the maximum amortization to 35 years from 40. They also abolished $0 money down and brought in a 5% minimum down payment. Is more action needed at this time? I don’t think so…what troubles me a little is how the government and the Big Six banks are reportedly having secret meetings that concern mortgage rules.
Affordable housing is part of the Canadian dream. The record low interest rates were brought in as part of the stimulus plan to help us get out of the recession. We’re not completely out yet… let’s hope the government takes action that will help Canadians, not hinder their ability to own a home.
My suggestion to the government is to flex some muscle and get the banks to cap or standardize how they calculate prepayment penalties on residential mortgages. We’ve seen far too many borrower’s with job troubles that tried to benefit from the record interest rates, only to be hit with enormous prepayment penalties of $10,000, $15,000 and even $20,000. Let’s help these Canadians.
It’s been almost 2 years since the rules that govern Mortgage Brokers and Agents came into effect…so why hasn’t everyone complied with the smallest of requests?
On July 1, 2008 new rules governing Mortgage Brokers and Mortgage Agents came into effect in Ontario. One of the changes was to make it easier for consumers to identify who they were dealing with. Prior to July 1, 2008 we saw all sorts of titles out there.. Mortgage Consultant, Mortgage Planner, Mortgage Specialist, etc… the list was endless…. and qualifications were sketchy.
Well, that’s all changed. In Ontario, there are only 2 designations. Mortgage Broker and Mortgage Agent. Both are authorized by a Brokerage to deal or trade in mortgages on its behalf and who have achieved other educational, proficiency and eligibility criteria.
But I’m still amazed at how many individuals and companies have not made the change. They still advertise and refer to themselves as Mortgage Planners or Mortgage Consultants, Mortgage Specialist…etc… My advice to Brokers and Agents is to make the changes immediately…These people are at risk of being fined and or having their license suspended.
My advice to consumers….BEWARE of anyone that has not taken the time to adjust and make the changes…if they won’t respect a minor change such as this, it makes you wonder what other regulations are not being respected.