New Mortgage Rules Coming Jan 1 Boost November Home Sales

General Barb Horvat 15 Dec

24c81aa7-eec3-4cbc-b5a2-7f5042efabdfSo here we are in the lead-up to the January 1 implementation of the new OSFI B-20 regulations requiring that uninsured borrowers be stress-tested at a mortgage rate 200 basis points above the contract rate at federally regulated financial institutions. It is no surprise that home sales rose in advance of the new ruling. Even so, activity remains below peak levels earlier this year and prices continue to fall in the Greater Toronto Area (GTA) for the seventh consecutive month.

In a speech this week, Governor Poloz of the Bank of Canada confirmed his continued concern about household indebtedness. Indeed, data released this week by Statistics Canada showed that households continued to pile on debt in the third quarter. The household-debt-to-disposable-income ratio rose by a percentage point to 171.1% last quarter. Relative to assets and net worth, debt also edged higher, but those ratios are much closer to longer run levels, painting a far less dire picture of household finances. And even with households taking on more debt, the share of income needed to service that debt was little changed in Q3, as it has been over the last decade. That will change as the Bank of Canada continues to raise interest rates gradually. However, the prevalence of fixed rate mortgage debt means households won’t feel the increase all at once. Instead, the debt service ratio is likely to rise only gradually. The rising cost of borrowing and more stable home prices should slow credit growth in the year ahead.

But with so much attention paid to the imprudent borrower, I think it is important to reiterate that the vast majority of Canadians responsibly manage their finances. For example, roughly 40% of homeowners are mortgage-free, and one-third of all households are debt-free. Another 25% of households have less than $25,000 in debt, so 58% of Canadian households are nearly debt free. Hence, mortgage delinquency rates are meagre.

The Canadian Real Estate Association (CREA) reported yesterday that home sales jumped 3.9% from October to November–the second most significant increase in two years. Home sales have now risen for the fourth consecutive month, led by a 16% jump in the Greater Toronto Area (GTA), which accounted for two-thirds of the national rise. Even so, sales activity in the GTA was significantly below year-ago levels. Victoria, Ottawa and Regina also recorded strong gains, while Calgary, Edmonton and Montreal posted modest increases.

Not all markets participated in the rally, though. Vancouver was among the few holdouts. Resales fell for a second-straight month by 3.7% in the Vancouver area where affordability strains represent a major issue for buyers.

New Listings Shot Up

Many sellers decided to list their properties ahead of the mortgage rule changes. New listings rose by 3.5% in Canada between October and November. Most of this increase took place in the Toronto area where new listings jumped by a whopping 22.9%. A report released earlier this month by the Toronto Real Estate Board showed that active listings in Toronto rose modestly above their 10-year average in recent months after plunging to historic lows at the start of this year. Pressure has come off Toronto-area buyers as they are now presented with more options. This could soon be the case in Vancouver too. New listings rose sharply in November and, with resales declining in the past couple of months, the sales-to-new listings ratio is finally moving toward more balanced conditions (see charts below).

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents how long it would take to liquidate current inventories at the current rate of sales activity. There were 4.8 months of inventory on a national basis at the end of November 2017 – down slightly from 4.9 months in October and around 5 months recorded over the summer months, and within close reach of the long-term average of 5.2 months. At 2.4 months, the number of months of inventory in the Greater Golden Horseshoe region is up sharply from the all-time low of 0.8 months reached in February and March.

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Price Pressures Eased

The Aggregate Composite MLS® Home Price Index (HPI) rose by 9.3% y-o-y in November 2017 marking a further deceleration in y-o-y gains that began in the spring and the smallest increase since February 2016. The slowdown in price gains mainly reflects softening price trends in the Greater Golden Horseshoe housing markets tracked by the index, particularly for single-family homes.

Toronto single-family house prices were down 11.6% over the past six months ending November 30 (see chart below). GTA condo prices have fared better, up 0.3% since late May, but the rise is minuscule in comparison to the booming price gains evidenced before the Ontario government’s ‘Fair Housing Plan’ that introduced, among other things, a 15% tax on non-resident foreign purchases of homes.


On a year-over-year basis, benchmark home prices were up in 11 of the 13 markets tracked by the MLS HPI. After having dipped in the second half of last year, benchmark home prices in the Lower Mainland of British Columbia have recovered and now stand at new highs (Greater Vancouver: +14% y-o-y; Fraser Valley: +18.5% y-o-y). Benchmark home prices rose by about 14% on a y-o-y basis in Victoria and by 18.5% elsewhere on Vancouver Island in November, on par with y-o-y gains in October.

Price gains have slowed considerably on a y-o-y basis in Greater Toronto, Oakville-Milton and Guelph but remain above year-ago levels (Greater Toronto: +8.4% y-o-y; Oakville-Milton: +3.5% y-o-y; Guelph: +13.4% y-o-y).

Calgary benchmark home prices remained just inside positive territory on a y-o-y basis (+0.3%), while prices in Regina and Saskatoon were down from last November (-3.5% y-o-y and -4.1% y-o-y, respectively).

Benchmark home prices rose 6.7% y-o-y in Ottawa, led by a 7.6% increase in two-storey single-family home prices, by 5.6% in Greater Montreal, driven by an 8.3% increase in prices for townhouse/row units, and by 4.6% in Greater Moncton, led by a 7.8% increase in one-storey single-family home prices. (see table below)

The MLS® Home Price Index provides the best way of gauging price trends because average price trends are prone to be strongly distorted by changes in the mix of sales activity from one month to the next.

Dr. Sherry Cooper

Dr. Sherry Cooper

Chief Economist, Dominion Lending Centres
Sherry is an award-winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.


General Barb Horvat 20 Jul

In light of recent events in the news, it only seems natural to start talking environment. While there are those who still don’t believe in global warming, hard scientific data shows the seas are rising. Not only that, this trend will continue full steam ahead into the foreseeable future. So, whether you currently own waterfront property or are simply dreaming about it, there are real concerns to be aware of. Here I’ve compiled (almost) everything you need to know about global warming and waterfront property.
When we hear the term “flooding the market” we don’t normally associate it with tsunamis or soil erosion. But for coastal dwellers all over the world, this is reality. Just a few months ago The New York Times published an article on the perils of climate change for real estate. They didn’t mince their words either. In it, a number of economists reported their predictions. Primarily that “the economic impact of a collapse in the waterfront property market could surpass that of the bursting dot-com and real estate bubbles of 2000 and 2008.”
According to Coastal Zone Canada (CZC), over 7 million Canadians, or roughly 20% of us, live in coastal areas. This includes the Atlantic, Pacific, Arctic and Great Lakes. With more than 240,000 km of coastline, 70% of which is found in the north, Canada has more waterfront than any other country in the world. And, as the CZC points out on their website, human activity “many kilometres away can ultimately have profound effects on the coast.” Not only are coastal ecosystems exceptionally vulnerable to climate change and natural disasters, so are the livelihoods of those who make a living from their resources.
The Canadian Disaster Database reports that storm events causing “significant damage” are more common along the east coast than any other. Though there are no shortage of examples here in BC. In 2009, the Fraser Valley and Metro Vancouver suffered severe rainstorms for a period of 3 days in January. This caused flooding, mudslides and landslides that went on until the month’s end. Altogether, the estimated cost of damages was approximately $16.5 million.
But what does that mean for current or would-be waterfront homeowners?
Primarily designed to tackle sea-level rise and coastal flooding, recent BC projects have made steps in the right direction. These include upgrading Metro Vancouver’s dike system, and the placement of protective boulders off the coast of West Vancouver. As outlined in the Government of Canada’s Marine Coasts in a Changing Climate, coastal erosion and flooding has historically been combated by building seawalls and dikes. But if we are to truly adapt to a changing climate, we’re going to have to change our mentality as well.

Adapting means using a combination of measures. For example, ‘soft-armouring’ is a term that refers to a number of less aggressive measures. This includes:
• Maintaining and restoring beaches, marshes and coastal vegetation: can help soften the blow from tides and storms.
• Restoration of salt marshes: work to halt soil erosion.
• Use of clean dredged sand to replenish protective beaches: preventing further erosion.
• Managed retreat: though usually a “last resort,” this option involves planned abandonment and gradual relocation of assets based on future risk assessment for natural hazards.
Soft-armouring is thought not only to be more efficient and less financially costly, but more sustainable over the long-term.
Gibsons, B.C. is an interesting example of a town following this protocol. It’s new development plans factor in both sea-level rise and the possibility of future flooding. If you are looking into waterfront property, it is essential to look into whether the area has a climate change program. A local government that understands what climate change is can make informed decisions with respect to real estate.
Also look into local regulations, bylaws, and zoning and building codes. See if there are policies to deal with infrastructure and vulnerability. This should include a plan for managing changes like ocean acidification, storm surges, adaptation and preparedness for coastal change. In your home structure it’s important to look into what your storm-water drainage system is capable of handling. Perhaps, look about 30 or 40 years into the future of the area. While you might not stay in the same home for all that time, it’s likely you will remain in the same community.
Adequate planning, preparedness and throwing your naiveté out the window is a good start. Because even when the biggest storm arrives, you will not be the one caught with your eyes closed.


Dominion Lending Centres – Accredited Mortgage Professional
Atrina is part of DLC City Wide Mortgage Services based in Vancouver, BC.



General Barb Horvat 29 Jun

Oh Canada; Our home and Native Land.
The land of opportunity.

You’ve arrived in a new country with hopes and dreams. If you’re an immigrant like me, one of these dreams is to own a home, and what better way to put down roots.
The first thing you want to do is open a bank account and start building credit as soon as possible with a credit card. Fortunately, there are also programs to help new Canadians purchase their first home and make it easier for your family to become established in Canada.
The new to Canada program will assist you with getting into home ownership sooner than you think.

Here is a list of documentation required:
• Valid work permit or verification of landed immigrant status
• Income Confirmation: You will need to provide proof that you have been working full time in Canada for at least three months. Proof of income through either an employment contract and pay stubs
• Proof of down payment: The total down payment will vary based on the final purchase price. The down payment can come from your own savings or it may be possible for your family to provide you with a gift. CMHC will insure newcomers with permanent resident status with as little as five per cent down, while non-permanent residents must have a 10 per cent down payment to purchase a home
• Purchase and Sale Agreement

A good credit history is important, however, as a newcomer, you may provide alternative credit supporting documentation.

Two (2) alternative sources of credit demonstrating timely payments (no arrears) for the past 12 months. The two alternative sources required are:
• Rental payment history confirmed via letter from landlord and bank statements
• One other alternative source (hydro/utilities, telephone, cable, cell phone and auto insurance) to be confirmed via letter from the service provider or 12 months billing statements

Buying a home in Canada is a big step. A Dominion Lending Centres mortgage broker can assist you with all the details.

Welcome to Canada, the great White North.


Dominion Lending Centres – Accredited Mortgage Professional
Alison is part of DLC Premier Mortgages based in Waterloo, ON.


General Barb Horvat 28 Jun

Most working Canadians have an income range in the middle class.
This income class includes teachers, firefighters, plumbers, engineers, nurses, construction managers and chefs – workers from across the economic spectrum. They provide and consume the bulk of services that keep society afloat, driving economic growth and investment with every purchase.
The middle class also has great challenges. Wages have been stagnant and the cost of housing and everyday goods puts a squeeze on the average budget, leaving six out of 10 Canadians living paycheque-to-paycheque with most accumulating debt.
In part, this has to do with everyday life and the growing demands on our set of unique challenges. However, we need to “control the controllables” and be smart and strategic to get ahead.

Here are some tips to keep your economic future on the right path:
1. Spend within your means.
Most people keep a balance at months end on their credit cards and lines of credit – some out of necessity, but some by choice because they want to keep up with the Joneses or fill an emotional void. If you are trying to get ahead financially, ask yourself what your plan is to get rid of that debt? It should not be something that is with you to carry over a balance. It’s time to assess your lifestyle and how you are using your home equity and the market to your advantage if you own a home. Holding the debt is a costly mistake- most debts outside a mortgage range from more than five per cent to 19 per cent. Credit is an important part of life and you need it. The biggest life hack is to pay it in full every month with an auto setup payment – this one strategy saves costs, debt and stress.

2. Emergency fund is a must.
Ask yourself this, what would happen right now if your car broke down, your house need a new roof, or you lost your job? Most Canadians would have to go to credit cards or lines of credit.
You need six months of expenses put aside, period. If you don’t have this you will begin a cycle of debt. There are ways to do this automatic withdrawal into an account from your paycheque or when your mortgage renewal is up.

3. Giving your retirement a raise and start in high school.
Consider how long wages have felt stagnant while the cost of everything goes up. When you are young and your wages go up, increase your retirement contribution. Get compound interest working for you. Time is your friend. By saving a percentage automatically by paying yourself first, your investment grows your options. There are tax free savings accounts and RRSP’s that will begin the foundation of your financial future. It should start from the moment you get your first job, then when you fast forward through your 20s to 50s, your investment doesn’t have to be as large. Life will throw you enough challenges at that time to deal with, and you already have time and compound interest working for you, and you are in front of it, not chasing to catch up.

4. Relying on RRSP’s, OAS and CPP.
Contributing to tax advantaged products are one component of investing, but they have restrictions. Also, government future income plans are always going to be changing. Having a proactive mortgage and finance plan will allow you to get your assets working for you, so you can have multiple streams of income. Being self-sufficient is empowering, then if and when the other options are still available and advantageous, they are a bonus and you are in control based on your proactive abilities.
5. Spending too much on depreciating assets.
The average Canadian spends $570 a month on a new car payment. This can go up to as much as $1,400 per month- that’s just for the car, not insurance, gas, or maintenance. The problem is that it’s a depreciating asset. To put it into perspective, that range in payment takes away qualification for a whopping $150,000 to $400,000 in mortgage amount qualification. So for someone in the middle class who intends to buy a home, which is an appreciating asset, the car payment should be the absolute lowest priority, and should be avoided whenever possible. Think of the power you could have saving that kind of money or having it in an income-generating asset.

6. Having a will and keeping it current.
Your will should include your up-to-date investments, insurance policies, real estate and family gems. With life happening so quickly, it’s easy to have a few stages fly by, but then things can get messy. You don’t want your hard earned money in the hands of anyone but whom it’s intended for.

It’s never a bad idea to speak to a Dominion Lending Centres mortgage specialist if you have a question.


Dominion Lending Centres – Accredited Mortgage Professional


General Barb Horvat 14 Jun

Another Sign Of A Economic Strength

Statistics Canada just released the Labour Force Survey for May, adding to the stream of positive economic indicators. While the jobless rate edged up 6.6% from a cycle-low 6.5%, it was the result of more optimism about job prospects as more people participated in the labour market. The jobless rate has been trending down in a see-saw pattern since February of last year (see chart). Adjusted to the way calculations are made in the U.S., Canada’s unemployment rate was 5.6% in May, compared with 4.3% in the U.S. The labour force participation rate in Canada (adjusted to U.S. concepts) was 65.7% in May compared with 62.7% in the United States. On a year-over-year basis, the participation rate increased by 0.2 percentage points in Canada, while it edged up by 0.1 percentage points in the United States.

Unemployment Rate in Canada (Chart)


Canada added 54,500 jobs last month, driven by a 77,000 increase in full-time jobs. This continues the upward trend in job growth that started in July 2016. May’s rise in employment was the third biggest one-month rise in the past five years–stronger than economists had expected.

There were notable employment gains in Ontario, British Columbia, Manitoba and Prince Edward Island. There was little change in the other provinces. Quebec’s unemployment rate fell to a record low of 6%. Manitoba has the lowest jobless rate in the country at 5.3%.
In May, employment increased in several industries, led by professional, scientific and technical services as well as manufacturing. The gain in manufacturing jobs at 25,300 is the most since 2002. There were smaller increases in transportation and warehousing; wholesale and retail trade; as well as health care and social assistance. In contrast, fewer people worked in finance, insurance, real estate, rental and leasing; information, culture and recreation; and public administration.

The number of private sector employees increased in May, while public sector employment and self-employment were little changed.

The stellar performance in job growth also finally came with a pick-up in wages. The pace of annual wage rate increases accelerated to 1.3% in May, after falling to a record low 0.7% in April. Another sign of potential tightness in the market is that wages for temporary workers are up 4.8% year-over-year.

The employment gains bode well for the continuation of the country’s expansion, which is the fastest among the G7 countries, as Canada emerges from the oil price collapse and benefits from a soaring real estate market.

It also could raise pressure on the Bank of Canada, which has recently sounded much more confident in the strength of the economy. Most economists anticipate a rate increase in the first half of next year. A separate report released Friday by Statistics Canada showed utilization of industrial capacity at the highest since 2007.

Over the past year, the economy created 316,800 new jobs, which was the most robust performance since February 2013, well before the oil price collapse. This pace of job growth has been rarely seen since the 2008-2009 recession.

The initial market reaction was a rise in the Canadian dollar.

In direct contrast, the U.S. posted disappointing job growth in May, just one of several signs indicating that the U.S. economy has hit a soft patch. The Federal Reserve may have reasons to be cautious and refrain from increasing interest rates when the Fed meets next week. However, most economists expect the Fed to hike rates once again next week and to signal its baseline expectations of another interest rate action later this year. The Fed will perhaps begin to outline its approach to slowly shrink its $4.5 trillion balance sheet. The Fed purchased Treasury bonds and mortgage-backed securities during the financial crisis and its aftermath, known as ‘quantitative easing.’ But the time is nearly ripe for the Fed to begin its reversal.

Provincial Unemployment Rates in April In Descending Order (percent)
(Previous months in brackets)

— Newfoundland and Labrador 14.0 (14.9)
— Prince Edward Island 10.3 (10.1)
— New Brunswick 8.7 (8.4)
— Nova Scotia 8.3 (8.6)
— Alberta 7.9 (8.4)
— Quebec 6.6 (6.4)
— Saskatchewan 6.2 (6.0)
— Ontario 5.8 (6.4)
— British Columbia 5.5 (5.4)
— Manitoba 5.4 (5.5)


Chief Economist, Dominion Lending Centres
Sherry is an award-winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.


General Barb Horvat 13 Jun

The following is from the Spring issue of Dominion Lending Centres’ Our House Magazine.

Cara Brookins built a new home for her family from the ground up

A house is often considered more than just a place to live. It’s a place of memories, stability and safety.
No one understands this sentiment more than Cara Brookins. The Arkansas mother of four has recently garnered a lot of international attention for her story. Brookins, who had no experience and little know-how, built her five-bedroom house with little more than a small loan and YouTube videos. It’s a considerable feat for sure, but it’s what got her to that point and what she’s learned since that makes her story even more intriguing. Brookins had been involved in a couple of bad relationships, including being terrorized one of her ex-husbands for a decade. Her last husband appeared to offer protection, but he too became physically violent and the pair divorced. It was 2007 and Brookins, who worked a good job as a computer programmer and analyst, admits that she and her family were destroyed emotionally and financially.

Building a foundation

Instead of buying a small home or an apartment in her town of Bryant, a suburb of Little Rock, she got the idea to build the home she wanted—herself.
“At the time, it seemed like obviously what anybody in my position, who had been through what I had, would do,” she told Our House magazine. “In retrospect, I don’t think that’s what everybody would do. I felt this desperation that I had to do something quick to make [my children] feel more powerful and in control of their lives and give them some courage before they went out into the world. This was an opportunity to do something that would give us the house we needed in the end, but that would also give us some sort of inner strength and family strength.”
Brookins researched the local building codes, drew up plans and headed straight to the bank for a loan. She got turned down numerous times until a bank finally gave her what she wanted. Brookins was approved for nine-month, $130,000 construction loan. So, in December of 2007, as the cold Midwest winter set in, she bought an acre plot of land and started to build. That meant laying down the concrete foundation, installing plumbing and getting electricity to the building. With her older teenaged children, aged 17 and 15, by her side to help, Brookins went to her day job in the mornings and worked on the house in the evenings.
“I knew we could build a house. I absolutely knew we could figure out a way to put this together,” says Brookins, noting her days were often 19 hours long. “Once we started, I doubted it many times.” But Brookins and her young family persevered, finishing the 3,500-square-foot house in the nine-month timeline, getting all the occupancy permits and moving in by 2009. She said she really had no choice. “I knew once I spent all that money, there was no way out, but it also felt good,” says Brookins, adding that when there is that much pressure, it’s amazing what people can do.
Moving in, however, wasn’t a cause for celebration. Instead, she described it as a feeling of absolute emotional and physical exhaustion. Adding to it, the day the family moved in, Brookins’ mother had a blood clot and tragically died. It ultimately took months to settle in to the home and appreciate what she and her family had actually accomplished.

Sharing her experience

It also took years before Brookins told her story. Rather than boast about her accomplishment, she said she hid it from people out of embarrassment. She explains she was ashamed of the decisions she had made, which put her family in a situation where she felt no choice but to build a house on her own. An avid writer in her spare time, a few years later Brookins opened up about her experiences to an author at a writer’s convention. She was encouraged to share her story with the world. So she did, writing her memoir, Rise: How a House Built a Family. The book was released in January 2017. When Brookins decided to put pen to paper, she wanted to include her entire story, warts and all. “To really own my history, it took six years and several different versions of this book to do that.” Brookins says she never imagined people would be interested in her story, but it turns out she was wrong. She has now parlayed her experience into motivational speaking, more book writing and even a potential television show.

Finding sanctuary

Now nearly 10 years since she hatched a plan to build a house with her own two hands, Brookins, 45, still lives in her home. Her favourite room is the library, which is her quiet sanctuary. Her eldest daughter and son have moved out and are embarking on careers of their own. Her daughter runs a successful business and helps mentor young entrepreneurs. Their success is something the proud mother never would have thought possible had she not brought them along in building a house. Brookins has no intention of building another house, except perhaps helping her own children if they ask. It was never her goal to be a contractor. When she shares her story with people, she said the point isn’t the house, but rather that anyone can follow their dreams.


General Barb Horvat 6 Jun

According to the latest Statistics Canada’s 2016 census data released last month, Canadian seniors now outnumber children for the first time, with 5.9 million Canadian seniors compared to 5.8 million Canadians 14 years of age or younger. The number of Canadian seniors is expected to continue to grow because of the gains in life expectancy.
As the only financial institution in Canada working exclusively with seniors, we often conduct research studies to get direct insight into the behaviour of the Canadian aging population. HomEquity Bank’s latest research study (May 2017), The Home Stretch: A review of debt and home ownership among Canadian seniors indicated that 91% of Canadians over 65 prefer staying in their home throughout retirement, however 78% have savings and investments, and only 40% of those have less than $100,000 set aside.

What does this mean for aging Canadians?
Canadian seniors are getting more comfortable with their debt, with many financing their lifestyle with debt. In this study by HomEquity Bank using Equifax data, it shows that among Canadian seniors, 15% still carry a mortgage, 30% carry unsecured lines of credit (LOC) and 10% have a home equity line of credit (HELOC). The total debt average for seniors is $29,973, which translates to $15,493 per Canadian senior.
On a geographical basis, British Columbia has the highest debt balance for seniors with an average of $41,054 per person compared to the national average of $29,973. This is due primarily to a higher mortgage debt. On average mortgage debt per senior mortgage holder in B.C. is $128,338 compared with the national average of $95,737, with 17.7% of the senior population in B.C. still holding a mortgage.
Moreover, Canadian seniors now rely heavily on government and other retirement benefits during their retirement.
– 77% rely on the Canada Pension Plan as their primary expected source of income;
– 73% rely on Old Age Security; whereas only
– 57% are drawing upon their RRSPs;
– 48% have a work pension; and
– 48% have savings

How can a CHIP Reverse Mortgage help?
The growing senior demographic in Canada prefers to age in place in the comfort of their home, despite their limited savings for retirement. The CHIP Reverse Mortgage from HomEquity Bank, provides a way for Canadians aged 55+ to unlock the value of equity in their home. Seniors can consolidate their existing debt and finance their retirement while continually protecting a portion of that equity, and they can help relieve the financial burden on their children.
Unlike a loan or conventional mortgage, the CHIP Reverse Mortgage from HomEquity Bank does not require any monthly mortgage payments, not even interest payments, and is only repaid once the homeowner(s) no longer live(s) in the home (when they move, sell or pass away). A reverse mortgage is a great solution that provides access to tax-free cash when Canadians need it the most and best of all, they get to remain in their memory filled homes for the remainder of their lives.

To read the complete HomEquity Bank and Equifax study on Debt and Homeownership from May 2017, click here.

For more info, contact your Dominion Lending Centres mortgage specialist.



HomEquity Bank – Senior Vice President, Marketing and Sales


General Barb Horvat 5 Jun

In the past, it was easy to give our clients the best mortgage rate available. Unfortunately, new government regulations have created a fragmentation of interest rates that make “giving you our best rate,” more complex.
It’s important to distinguish between what is “insurable” and “uninsurable.” An “insurable” mortgage is approved at 25 years amortization and at a higher rate than what a borrower would actually be paying (called the qualification rate – at time of this article, it is 4.64%). An uninsurable mortgage is any refinance, mortgage on rental properties, mortgages approved at 30 years amortization, and properties worth more than $1 million.
Below is some information that outlines which scenarios allow you to get the best interest rate available, and what type of lender can provide these rates.
Please note: I am assuming average to above average credit in the scenarios below.

Best Rates – Monoline Lenders
Insured Mortgages
• On all purchases with less than 20% down payment, insurance is mandatory
• On purchases with 20% down payment or more, insurance may also be obtained
The absolute best rates are for mortgages that are insured by one of the three Canadian mortgage insurance companies: CMHC, Genworth or Canada Guarantee. When your mortgage is insured, the insurance company steps in to pay your monthly mortgage payments to the lender if you don’t pay. An insured mortgage is inherently a lower risk for the lender than a mortgage that is not insured.

Great to Best Rates – Monoline Lenders
Insurable, low loan to value Mortgages
• You have a large down payment
• Your mortgage is for a purchase on a property under $1 million in value
• Your mortgage is approved at 25 years amortization at 4.64%
When your mortgage can be insured, Monoline lenders take it upon themselves to insure your mortgage for you, making the mortgage less risky to them so that they can provide you with the lowest rates. However, insurance costs for lenders increase with mortgage loan to value. This increase in insurance cost is transferred to you, the borrower, providing you with slightly higher interest rates.

Good to Great Rates – Banks and Credit Unions
Uninsurable Mortgages or insurable, high loan-to-value Mortgages
• On refinances
• On mortgages that require 30-years amortization
• On mortgages where properties are over $1 million in value
For uninsurable mortgages, our normal go-to lenders have higher interest rates because they are forced to insure their mortgages, making them pass the extra costs to you, the borrower. On the other hand, banks and credit unions are not required to insure their mortgages, making them the best fit for higher loan-to-value mortgages.

Good Rates – Monoline Lenders, Banks, and Credit Unions
Rental properties and stated income
• Rental properties
• Stated Income
Most lenders will increase your interest rate on rental properties because they see these mortgages as having a higher risk than ones on owner occupied homes. Also, lenders may also increase interest rate for self-employed individuals who need to prove a higher income than what they have stated on their tax returns.

Highest Rates – Private Lenders
Mortgages that cannot be approved through regular lenders
• Stated Income B Side
• Equity Mortgages
When a stated income cannot be insured, lenders increase their interest rate to offset the risk of someone who cannot prove their income. An equity mortgage is one where a client has down payment or equity but no income shown. Lenders look at these files as having the highest risk.

Call a Dominion Lending Centres mortgage professional today to see how we can help you get the best interest rate on your mortgage so you can buy your dream home!


Dominion Lending Centres – Accredited Mortgage Professional
Eitan is part of DLC Origin Mortgages based in Vancouver, BC.


General Barb Horvat 2 Jun

Life can definitely throw some challenging financial situations your way. As mortgage professionals, we can provide solutions and strategies during or after these challenging times in order to get you back on track. We have access to banks, trust companies and mortgage companies that specialize in this transitional period to help you move forward with the best mortgage plan for you. We protect your credit by negotiating with multiple lenders to find a solution for you.

If you have never owned a home and have had a consumer proposal, the good news is that you are already accustomed to the discipline of saving money every month. Should you choose to continue to grow your savings, those funds can then be put toward a down payment and re-establishing credit.

If you own a home already, there are lenders that will help you refinance and pay out your proposal earlier in order to accelerate your transition period.

After bankruptcy, different lenders will issue mortgages based on the amount of time since you were discharged, the amount of down payment on a purchase and/or the current equity in your home if your already own. Lenders then price their rates based on these aspects of your application.

At Dominion Lending Centres, we look forward to learning about your journey while protecting your credit and guiding you through the best strategy on a moving forward basis.


Dominion Lending Centres – Accredited Mortgage Professional
Angela is part of DLC Angela Calla Mortgage Team based in Port Coquitlam, BC.



General Barb Horvat 28 May

Since 2012, it’s become the wild west of mortgage options out there for those folks who are living the Canadian dream of being Self Employed (also known as BFS, Business for Self). 

In 2012, the Office of the Superintendent of Financial Institutions introduced Guideline B-20, which required federally regulated banks to tighten the rules for approving mortgages. Without boring you with what that mortgage jargon translates to you, the bottom line means you “generally” have to qualify now from your Line 150 of your tax return. That’s NET income, not GROSS income.

Don’t freak out yet! There is good new below…

As BFS folks, one of the perks of being self-employed is we don’t pay as much in taxes as we have business write offs we can use to lower our GROSS income. We are now being penalized with many lenders with higher rates and fees with these new rules.

I wish there was a simple book with straight up rules for the BFS mortgages, but there really isn’t.
• It depends on your credit
• It depends on where your income is coming from and how long. Is it commissioned, contract, invoiced, under the table or under your mattress?
• It depends on your down payment.
• It depends on so many factors…hence you really need a mortgage consultant who really understands BFS mortgage programs.
There are a few programs you may fit under: Stated Income, BFS Conventional, or Alternative or Private lender. All of them are slightly different, but you will fit somewhere with someone.

Not to pick favourites, but here are a few lenders and their programs (through your Dominion Lending Centres mortgage professional):
B2B Bank has a fantastic BFS Expanded Program (actually nine in total) that allows 12 months of bank statements showing income vs those Notice of Assessments. They also don’t charge any mortgage premiums or fees!
Street Capital has an insured Stated Income to 90% (i.e. 10% down payment) program. You have to be two years in business filed, 5% of your down payment has to come from your own savings, and no “commissioned sales” folks here.

Common Questions I get:

Q: I was working with a company as a computer systems analyst for the past three years. Now I am self employed as a computer systems analyst. Can I still qualify for a mortgage with less than two years as filed self employed?
A: Yes, as long as you are in the same job role, you should have no issues.

Q: I heard you need 20% down to qualify for Self Employed Mortgage.
A: There are a few lenders that allow for 10% down now.

Q: I am a waitress and make most of my money in tips. How can I use this to qualify for a mortgage.
A: If you’re not declaring your tips on your taxes, then some lenders will look at 6 months deposits into your account.

Q: Can I refinance to pay off my Canada Revenue debt I owe:
A: Yes, very common practice.

Kiki’s Korner of Self Employed mortgage tips:
1. Keep your business money deposited in one account. Separate your expenses and your income accounts.
2. Leases or Loans on vehicles for business should come out of your BUSINESS account.
3. If your company is paying you a “stipend” or “allowance” for you vehicle, make sure it’s taxable income. You will need two years to use this as income.
4. Make sure your invoices match your deposits.
5. When depositing “other monies” i.e.: tips, tag it on your deposit slip so it shows up online with your deposit.
6. Keep important documents such as articles of incorporation, GST/HST registration or business licence in one folder with all your tax returns. Keep records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. Keep records for seven years if you file a claim for a loss from worthless securities or bad debt deduction. Be organized.
7. If you’re not filing business financials, file T2’s if you are incorporated. Filing business financials may be more expensive, but worth it for mortgage qualifying with more lenders.
8. If you pay yourself dividend income, you will need two years of this form of income.

If you’re in business for yourself, congratulations! Keep up the good work. There are many moving parts to planning and qualifying for a self-employed mortgage, so if you’re just starting to look at the idea of a mortgage – plan NOW!

I too am self-employed and work with many professionals such as lawyers, doctors, pharmacists, management consultants and self-employed folks such as truck drivers and waitresses. You’re all important and have different incomes we can use to make your dream come true.


Dominion Lending Centres – Accredited Mortgage Professional
Kiki is part of DLC Hilltop Financial based in Langley, BC.