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Originally Posted by Slava
^Great post and I totally agree with your last sentence.
Just wondering (you're the expert here!), can you just relate how many NINJA (No Income, No Job) mortgages you wrote during the boom times? My guess is zero....but we might as well hear that from the horses mouth if you don't mind.
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I personally have never written a NINJA loan and as far as I know Canada never had them to the same extent as the US. Lending guidelines are certainly tighter now than they were a few years ago. But even during the boom times you had to show good credit and the income to support.
There were certain lenders that would lend based on equity in your home (usually 20% or more) for people that had credit or other issues, but as far as I know there were no NINJA loans in Canada. I started in the business in 2007 however so I can't say for certain what happened previous to that. However I have never heard any associates ever mention anything like that was ever available.
One other thing to note on the zero down 40 year amortization mortgages - many lenders actually charged a rate premium on those loans. So chances are they could actually be paying a higher rate now than when they renew. If someone got the 40 year am 5 years ago and their mortgage is up for renewal this year, they are able to renew at 35 years as well. It's not like they have to all of a sudden drop to a 30 year and deal with higher payments because of a shorter amortization. CMHC is allowing everyone to continue with your original amortization schedule.