Change of Canada mortgage lending policy
Canada's lending policy has always been a lot tighter than US especially among all the major banks. A couple of years ago, a few major banks started not granting mortgages to apartments less than 500 sf or they would approve the lending only depending on which part of the city. Down payment for those properties are going to be varied based on whether you are a first time buyer or investors. The rule favors first time buyers.
Even prior to the US financial crisis, a few major banks have changed their lending policy towards some mortgages:
1) No mortgages are granted towards hotel/residential building: As far as I know, 3 major banks no longer grant mortgages to buyers who bought in those projects excepted the pre-approved files.
2) Any purchase over 1million will have a different lending scale which means you can no longer obtain 75% guaranteed lending.
3) Variable rates: in the good old days, we could get variable rates at Prime minus over 1%. It then scale down to 0.65%, 0.6%, 0.4% and now at zero.
4) there is only one lender doing the 40 year amortization right now and as you can imagine they're swamped. The only stipulation on the 40 year is that the offer has to be "accepted offer" before Oct 12th and approved by CMHC by Oct 14th midnight.
Being an Asian immigrant myself, I understand most of us in general don't like to disclose our entire fiancial situation to anybody including our banker. I also understand most Asians don't get pre-approval before they go shopping for a property because they usually get approval even without any proof of income. However, please be aware that this is not necessary the case any more especially if you deal with the major banks. Just a note to share with the viewers that there are a lot more lending institution around in Vancouver. U don't need to stick with the major banks especially when you are only borrowing money not putting your saving there.
In a market like this, serious buyers are actively hunting on the market. The market is not dead. In my opinion, US is going to approve the Wall Street bail out plan, National Rescue Plan, one way or another. Once it's approved, I'm sure the stock market is going to become active again.
If you want to have a detail discussion for your real estate investment plan, please feel free to call me at 604-412-5860 or email me at tinamak@tinamak.com
