Mortgage Broker

Fall 2018

Mortgage Broker is the magazine of the Canadian Mortgage Brokers Association and showcases the multi-billion dollar mortgage-broking industry to all levels of government, associated organizations and other interested individuals.

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CMB MAGAZINE cmba-achc.ca fall 2018 | 27 urban & rural will pay more [interest on a mortgage loan]." "My other big challenge is about types of income," she adds. "Income qualification can be a challenge in a rural environment. We have a lot of self-employed people and the new stress-test sometimes means they can't qualify for enough to buy a home." Some people in Prince George work in seasonal businesses such as trucking or logging and lenders oen need to be informed that those individuals may show gaps in their income during spring and fall shutdowns. Spring break- up is a good example, when logging trucks are parked due to road bans that occur when frost heaves up the ground. Incomes derived from trucking and logging are quite common, says Wakelyn. "Everything is about documents up front. I would never consider approaching any lender without documents and the pre-approval process that must take place prior to submitting to the lender. ere are oen differences between the way the lender and the client calculate income so it's necessary to verify that information through documentation." More stringent lending regulations have had a strong impact in Prince George. While some buyers are having trouble qualifying for a mortgage, others seem to be coming up from Vancouver in search of more affordable living. MoRe house foR the Money Over in Nanaimo, we find a similar story. Broker Caroline Roach, co-owner of e Mortgage Centre, Fitzwilliam Mortgage, says she's helped several people relocate from B.C.'s Lower Mainland. "If you can do your job over here, you can get more house for your money," she says. "Nanaimo has always been a single-family residential town. We like our campers, quads, boats, trucks and trailers — and we have the mentality that it's better to buy a house. But that is not as feasible any more due to the new regulations." Of late, Roach has noticed that her clients are shocked to find out what mortgage money they qualify for under the new rules. Families going through separations are particularly vulnerable when the family home is sold and each partner then has to qualify as a single- income applicant. Roach handles all kinds of mortgage transactions, from city condos to land-only deals to rural properties with a mobile home. When it comes to getting the deal done, she says access to a variety of lenders is key and proper documentation is critical. "Many people forget we're trying to get an approval on the buyer as well as the property. ose new mortgage rules created a 20 per cent drop in buying power. I am slowly starting to see a shi in the mindset of first-time buyers who are now realizing they may have to adjust their expectations and buy something smaller." Roach says the new rules have caused other buyers to wait in the wings to see what happens next. But in a city with an overall lack of housing, it's getting harder to find a home. "Nanaimo is growing at a very rapid pace. ere is housing being created but not fast enough. In addition, the real estate boom of recent years has led to a plethora of brokers, so the competition is stiff." Still, Roach says the greatest lesson to learn from a changing market is that no two deals are alike and there is always opportunity. "e opportunity here is that brokers have access to more options and brokers take more time to plan. We can find out what's going to make it work and what someone needs to do to get in the door." nontRaditional alteRnatiVes Sometimes, mortgage brokers must look outside traditional lending channels to fund a deal. "Consumers who don't fit the standard box of perfect credit and an 'A' deal are having a harder time fitting in, so we are seeing a change in the mix of lenders," notes Meini Ickert, vice-president of sales for Mortgage Architects Western Canada. "e new rules have caused a steady and noticeable migration to the non-traditional alternative and private lenders," he continues. "I know from our own company that the increase in non-traditional lenders has spiked considerably." e tighter lending standards create other hurdles for the big-city broker. Property prices and buyer qualification are real challenges, along with competition from the banks and other brokers. "At last count, in B.C. there are about 3,400 mortgage brokers," says Ickert, who has been in the industry since 2001. "Of those, I would argue that approximately 75 per cent find themselves in the Metro Vancouver/ Vancouver Island region." And then there are the "no subject" deals where buyers have waived their right to make the offer conditional upon obtaining financing. "at makes it harder to get a mortgage in place and it's the bane of all brokers' existences, when the lender makes some changes to the conditions and there is little time to react." Ickert says B.C.'s hot real estate market has attracted many new mortgage brokers, urban and rural alike. ose new mortgage rules created a 20 per cent drop in buying power. I am slowly starting to see a shi in the mindset of first-time buyers.

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