Monday morning I had the opportunity to sit with Pierre Poilievre our MP for Nepean- Carleton and discuss mortgages.
The upcoming changes and how I see the changes affecting clients now and moving forward. Let me tell you; I was nervous. (I’m not sure why?) Pierre was kind, thoughtful, fully engaged and interested in the conversation. He asked great questions, some of which I knew the answer to, some I didn’t, there was no judgment.
I see a shift in mortgage approvals, what was once considered an “A” file with some challenges or bruises, is now becoming an alternative file or “B” type file. Clients who would have fit comfortably into the “B” / nonconforming or Alternative lending market are now being squeezed over to the Private lending market as Alternative lenders limit their lending criteria, there is only so much money available which allows the nonconforming lenders to be choosier. What this means is, if you are having a life hiccup, using your home equity may become very expensive.
We also discussed the new qualifying rules and the unfairness that conventional mortgagors would face qualifying at a much higher rate than the default insured mortgages. The impact this will have on their purchasing power and refinancing abilities, more so, what it says to our subconscious. What is the point of saving for a 20% down payment when you will qualify for a lower purchase price and receive a higher interest rate? Where is the fairness? I know that somewhere up in the towers, someone is crunching numbers and guiding the powers that be. It may make sense to the accountants, financial analysis and the actuaries but when the rules are applied, have any of the changes served to solve the housing market issues? Maybe? Some? None?
What I’m seeing, Toronto will always be a hub of activity because of immigration. Alberta will ebb and flow with the economic times and oil prices. British Columbia has a unique housing environment due to foreign purchasing, but the BC Government was resolving the issue on their own.
What I know to be true, our Federal Government did not consider human nature. Canadians have always been told; they need to own a home. Most Canadians will own or keep their existing home at any cost. Housing prices will always be higher in the fall and the spring because of the school year, and the majority of the population just wants to feel like they are going to be okay.
I truly appreciate the time Pierre took from his busy schedule to sit with me, hear me and allow me to feel heard. Thank you for the gift of your time. I may be back again. If you live in the Nepean Carleton riding and have a concern, reach out to Pierre, he’s a good listener, and I was not paid or encouraged to write this post. : )
If you have concerns or questions about the upcoming rule changes, reach out, I’m here to help. Jacquie