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Anthony Ibhahe - Real Estate Newsletter - May 2015 Edition - *My Birthday Month!*
Anthony Ibhahe PREC, Associate Broker - Real Estate Agent
Royal LePage West Real Estate Services
aibhahe@gmail.com
604-788-0179
https://www.aibhahe.com/
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CMHC tightens Mortgage Lending Rules and Increases Mortgage Insurance Premiums
  
Pdf link for the full article
Last month CMHC announced it is going to increase mortgage default insurance premium effective June 1st of this year. CMHC also announced a few changes to the mortgage lending rules for both high ratio (high risk) and low ratio (conventional) mortgages.
What does this basically mean for Buyers? The new changes means four things for the Buyers:
1) Insurance Premium: If you have 10% or less for down payments your CMHC default insurance premiums will go up from 2.75% to 3.45%. This would make a big difference in your mortgage payments as well as how much you will qualify for
2) New Qualifying Rate: Previously only high ratio mortgages (people with down payments less than 20%) were qualified at the Benchmark rate. Low ratio mortgage was qualified at the lender-discounted rate. Now it is the same for terms less than five years. Regardless of variable or fixed, high ratio, or not, all mortgages less than five years will be qualified at the benchmark rate.
3) Cash Back Mortgages: Now the client may get one only if they don’t need one. Yes I said it and it is odd…lol…now clients can only get cash back if they can first come up with the full down payment from traditional sources. So basically they first have to get qualified without the cash back. Don't forget lenders charge a higher rate for cash back so I don’t think many clients will go for it except for those clients doing it only if they are using the cash back money to pay off higher interest debts.
4) Employment Income Verification: There is now going to be more scrutiny of borrowers income and employment verification. It is no longer optional for lenders to only ask for pay stubs or T-4’s. All lenders now have to call the employer to verify borrowers income, position and tenure of employment.
Click on the link attached above to read the full article. Please call me or send me an email if you want to determine who is impacted and how big of an impact it will really have on the real estate market.
Winnipeg Couple Ordered to Pay More than $100,000 in Repairs to get their Home up to Code - Title Insurance Covered It!
Video Link: $100,000 In Repairs Video Covered By Title Insurance
Most lenders would usually require a purchaser to purchase title insurance as one of the conditions/requirements for advancing a mortgage loan. A lot of people do not understand the exact purpose for this insurance, and what it actually covers post the completion of a property purchase.
Well it turns out, it covered this couple’s $100,000 real estate property deficiency repair bill.
A full video clip of this story can be seen above on the attached CTVNews link.
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10km Walkathon Fund Raising Event for St Catherine’s Elementary School
Hurray!!! I completed a 10km Walkathon fund raising event with my son, Ainose, to raise $25,000 for St Catherine's Elementary School.
This year, with assistance from family members and friends, Ainose successfully raised $525 for the event compared to about $300 he raised for the same event last year.
Everyone had fun completing the 10km Walkathon. The children especially had the most fun doing it because they were off school for the entire day.
The money raised this year will be used to fund important programs and activities in the school. Some portion of the money will be used directly towards updating all of the outdated washrooms in the school.
Thank you so much to all my clients, friends, family members and co-workers who donated money for this event!
Four Things That Can Go Wrong After Pre-Approval
There are four things that could potentially derail your mortgage loan even after you’ve been pre-approved by a lender.
1) You have insufficient documentation
2) You don’t have enough funds for your closing costs
3) You made a large purchase, or purchases and have taken on additional debt
since pre-approval
4) Your income or employment situation has changed
It is very essential that you avoid all of these types of issues at all cost so you are more likely to receive a “clear to close” green light from the underwriter.
1. You have insufficient documentation.
Mortgage lenders request a variety of financial documents when approving borrowers for home loans. These include Notice of Assessment (NOA's), bank statements, pay stubs and a current employment letter stating your type of position with your employer, start date, guaranteed hours per week, pay rate per hour or total annual income.
Most mortgage lenders would issue a pre-approval based on partial documentation, and usually do not require all of the necessary documents up front during the pre-approval stage. Complete documentation is required during the final approval stage, which occurs after you make an offer on a property and get the offer accepted.
In the best-case scenario, this will only lead to a slight delay in the mortgage approval process. In the worst-case scenario, it could cause you to be denied a mortgage due to insufficient documentation — even after you’ve been pre-approved for a loan.
You can reduce the chance of document-related problems by rounding up your documents way in advance before the lenders ask for it. The simplest and best method to do this is by staying in close contact with your broker before and during the underwriting process.
For a full detailed explanation of the remaining three reasons, please message me at: aibhahe@gmail.com
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