Advice for clients: Prepare for deal delays
Justin da Rosa
REP
Lenders were caught off guard by recent mortgage rules changes, according to one professional who claims deals are being delayed.
“Every single lender is behind dealing with the changes and most of them got caught by surprise because there was no consultation,” mortgage broker John Panagakos said. “Big lag getting information, getting updates, and getting approvals. Lenders I deal with are dealing with it well.
“Right away I had clients that were trying to buy a house in the $650,000 range and today they put in an offer on a condo for half the price. It was because of the stress test. The only workaround is someone getting a co-signer.”
The industry was surprised by a number of mortgage rule changes that were announced in early October.
One of the changes was a tweak to qualifying rules for insured mortgages.
Effective October 17, all homeowners taking out a high-ratio insured mortgage are now required to qualify at the Bank of Canada posted rate. That requirement will be extended to low-ratio insured mortgages on November 30 – meaning an even larger pool of clients will be impact and, perhaps, qualify for less house than they originally planned for.
However, with that effective date for that change a month away, lenders will have enough time to prepare – which means delays won’t be as pronounced.
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