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It seems that the news we got couple days ago from the Minister of Finance regarding the mortgage industry changes are " provoking" more changes, internally, from lenders out there , that are affecting the consumer directly.

  • At the present time, many lenders  will not be accepting rental applications (owner occupied-rentals are still eligible and being accepted)
  • Any new refinances must close on or before November 15, 2016

Today the wave of bad news continues, as many lenders are starting to decline doing Preapprovals.

The reason for that is because, based on the new rule of " Stress test" ( posted/ sent by me to all of you yesterday), no deal is appoved anymore unless it's approved by the insurer. A mortgage approval is submitted to the insurer ONLY WHEN THE DEAL IS LIVE , meaning they already found the property and have an accepted offer on it. However, even if your deal is submitted and approved by a lender , but not yet approved by the insurer B please be prepared, as it may change. Your mortgage must be approved by both the bank and the insurer, BEFORE SEPT 17th 2016!

A preapproval is tipically just a rate hold, and banks will not hold any rates based on the old approval rule, as they have to comply with the new rule( this applies to purchases only) .  So, for all of you out there that have an existing preapproval with a Financial Institution, I strongly suggest to contact your Mortgage Broker/Bank, to go over all the preapproval numbers again and get any questions answered that you may have. Especially if you were aiming for that 5 year fixed rate!

We are still waiting for confirmation from lenders regarding transfer and refinances rules, I will keep you posted as we get more clarification from lenders and the insurers.

If in the meantime you have questions about any of the changes, please do not hesitate to contact me directly.

Best regards,
Doina Biolan  B.Comm
Mortgage Broker, TMG The Mortgage Group Alberta