Quote:
Originally Posted by MillerTime GFG
Renewing with your current lender I'm sure will be fine, as you can always do that without having to re-qualify as long as your payment history is good, but I'm not sure what will happen if you want to transfer to another lender, as you are subject to re-qualifying in those cases. What if using the benchmark rate pushes your ratios out of line? You're then stuck with your current lender, which may not be ideal.:
|
When you transfer you don't apply for new mortgage insurance coverage. These changes are for new applications. As a transfer is not a new application a lender's internal guidelines will apply.
Now, I do work for a large Alberta Credit Union and I am a fan of these changes. I'm not sure how anyone can argue pushing people into mortgages at 42% TDS based on 2.39% is in a client's best interest. There are too many bad bankers and bad brokers who either care only about their sales objectives or basis points they are getting to truly care about providing sound advice. Because of the competitive nature of the industry, what we're seeing is the government step in to help consumers because there is nobody else looking out for them here.
Secondly, having a client roll a bunch of debt into a mortgage over 25 years is crazyness. AFC is 100% correct in his comments regarding how easy it is to bury debt into a mortgage. Its absolutely ridiculous that someone can run up debt, roll it into their mortgage for a minor cost and move on. A consolidation loan may be at higher pricing, but is at least retired in far fewer years than 25, unless bankers and brokers are now doing mortgages with 5 year amortizations on a regular basis. For the record, that's not happening.
People need protection from themselves sometimes. I'm not a huge fan of government intervention overall, but I can appreciate that it is needed here.