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May 1st 2007
I. This week Bill C-37 was passed by the Federal Government. This bill
allows for new purchasers to avoid paying high-ratio mortgage insurance
premiums when they have 20% down payment. Previously, one had to pay 25%
down payment to avoid these fees. The average home buyer will save about
$2500.
II. Standard mortgage amortizations have been increased from 25 to 40 years.
This allows your clients to save approximately $100 in monthly payment on a
$100,000 worth of mortgage and allows them to afford a bigger home.
III. This is the one that none of your existing lending partners told you
about. This new rule has been able to help our team close significantly
more deals over the past 6 months. Either they didn’t tell you because they
themselves didn’t know or didn’t have access to this feature, as most
lenders did not make it available to the general mortgage brokerage
community. So what is it? It is the changes in how the required income to
qualify for a mortgage is calculated. Previously, someone with excellent
credit could only qualify for a mortgage payment based on 32% of their gross
income (GDS). Now, they can go upto 44% GDS. How will this help you make
more money? You can now sell a $300,000 home to a client who only qualified
for a $200,000 house.
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