If you are purchasing another property
You are an experienced buyer, as you have gone through the purchase process before.
However, the mortgage world is a very fluid and changing environment, so things may not be the same as they were when you last purchased.
It’s important to know what your options are in this NEW and ever evolving mortgage market. We want to make sure that you have access to the right tools to succeed in your next home purchase.
There are recent changes that no doubt will have an impact on how buyers can qualify for their mortgage.
- Lenders are now looking at things differently than they were before.
- Rental income from suites and rental properties are being looked at differently.
- Your net worth, and how much cash you have available.
In the past, your income and your ability to debt service, and qualify the mortgage was often mitigated by how much cash reserves, or net worth you had. In today’s world, while cash reserves and a strong positive net worth can never hurt, they are no longer direct substitutes for debt servicing gaps.
It is even more important now to consult with a professional to make sure you are maximizing your income, when it comes to lender policies.
You would want to find a professional who has access to more than just one lender.
Not all lenders look at rental income the same, and this can be the difference between getting approved or not.
You might be thinking, “That’s fine, I am not going to hold two properties, I plan on selling my current home and then buying another, so I don’t really have to worry about anything.”
There are still some things for you to consider.
- Your mortgage is not “portable” anymore – at least not in the manner that you might perceive “portable” to mean.
- You will need to completely re-qualify under today’s far more stringent guidelines for the same mortgage you hold. Yes, even if you are not borrowing any more money, and all you are doing is wanting to “port” the same mortgage, with the remaining term, on to a new property, you still have to re-qualify.
We have often seen clients discover that they now qualify for significantly less than their current mortgage balance in these types of situations.
Discover this BEFORE you list and sell your current home.
You can save yourself from a lot of stress and heartache by taking a couple of extra steps before you list, and/or accept an offer on your current home.
If you are self employed (the owner of the business) you need to be having a detailed conversation with an expert.
Your conversation should include a complete overview of all documents required.
The list has grown radically since 2012.
You likely think you are awesome, because your company is awesome, and no doubt you and your company are awesome!
However, what it all boils down to in the end is your Personal Line 150 documented income.
Having $100.00 or $100,000.00 in liquid capital will not matter.
Having never missed a mortgage payment in your life will not matter (99.69% of CDN’s never miss a payment – so ‘special’ is relative here).
Where our business owner clients used to provide a single CRA Notice of Assessment, and not much else, they are today being asked for the following;
- 2 years CRA Notice of Assessment
- 2 years T1 General personal tax returns (complete & accountant prepared)
- 2 years Corporate Financials (retained earnings are of limited help)
- Documented proof of business for self (i.e. Notice of Articles, GST returns, business licences)
From a few pages, to a few hundred!
Things have changed.
The list goes on….
Keep in mind that not all lenders are offering bridge loans anymore, and the rules and regulations with bridge financing has changed as well. It has also gotten a lot more expensive.
Make sure that you are aware of them before you set your dates, and assume that your bank will fund you the money for the down payment, or carrying costs.
With a changing mortgage marketplace, you need to be updated always so that you can make a decision that is tailored to your current situation with the flexibility that you require.
I can help you through the entire process, helping you explore all your options.
Make a call now and have your financing plan in place and be sure it is workable prior to accepting an offer to sell your current home.
This is vital!