A Bit of Good News! CMHC wants to make it easier for self-employed Canadians to get a mortgage

 

CMHC wants to make it easier for self-employed Canadians to get a mortgage

CMHC is giving lenders more guidance and flexibility on determining whether a self-employed person qualifies for a mortgage.

OTTAWA — Canada Mortgage and Housing Corp. is making changes intended to make it easier for the self-employed to qualify for a mortgage.

The national housing agency says it’s giving lenders more guidance and flexibility to help self-employed borrowers. Self-employed Canadians may have a harder time qualifying for a mortgage as their incomes may vary or be less predictable.


 

 

Self-employed Canadians are key contributors to strong and vibrant communities and make up about 15% of Canada’s population. However, they may have difficulty qualifying for a mortgage as their incomes may vary or be less predictable.

In line with the National Housing Strategy’s mission to address the housing needs of all Canadians, Canada Mortgage and Housing Corporation (CMHC) is making a number of changes aimed at giving lenders more guidance and flexibility to help self-employed borrowers:

  • Providing examples of factors that can be used to support the lender’s decision to lend to self-employed borrowers who have been operating their business for less than 24 months, or in the same line of work for less than 24 months such as acquiring an established business, sufficient cash reserves, predictable earnings and previous training and education; and
  • Providing a broader range of documentation options to increase flexibility for satisfying income and employment requirements when qualifying self-employed borrowers such as the Notice of Assessment (NOA) accompanied by the T1 General, the CRA Proof of Income Statement and the Statement of Business or Professional Activities (T2125) to support an “add back” approach for grossing up income for sole proprietorship and partnerships.

These enhancements, which apply to both transactional and portfolio insurance, will take effect October 1, 2018.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Shannon Babcock PREC
Buy Smart. Sell Smart.
Committed to Your Real Estate Success
Century 21 Creekside Realty
Cell: 604-795-1081
http://www.shannonbabcock.com
E-mail: shannonbsells@gmail.com
Twitter: @shannonbsells
President’s Club Award Winner 2008-2017

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Although BC’s Economy Remains Stable Chilliwack and area took a noticeable dip last month, pointing to one significant factor – the impact of the “stress test”.

LOCAL HOME SALES FEEL THE “STRESS”

Mortgage Stress Test
by Steve Lerigny | Jun 04, 2018

June 3, 2018

Although BC’s economy remains strong, home sales in Chilliwack and area took a noticeable dip last month, pointing to one significant factor – the impact of the “stress test”.

At a time of year when sales are typically at their strongest, 324 home sales were recorded last month, compared to 511 during the same month last year.  This represents a 36% decline over last May, in line with the provincial average.

“With all other variables being fairly constant such as a strong provincial economy and moderate hikes in interest rates, the drop can be attributed to the more stringent lending rules introduced by the federal government early this Spring,” said Chilliwack and District Real Estate Board (CADREB) President, Lori Maier.

Under the new regulations, potential home buyers need not only qualify for the amount borrowed on a new home, but have to be able to withstand any future mortgage rate interest hikes.

“This likely has caused some first-time buyers especially to put their home-buying plans on hold,” said Mrs. Maier. “The recent issues of a trade war isn’t helping to instill confidence either.”

Of the 324 sales posted last month, the highest number (40) were in the $550,000-$599,999 range followed by 39 in the $450,000-$499,999 range. There were 14 sales of homes over the $1 million mark, including 1 over $2 million. At 63, apartment sales were strong, indicating stronger demand for lower price points.

Supply of homes for sale is increasing to a healthier level, with 1,277 active listings on the market at the end of May, compared to 936 in May of last year. “With decreased sales, it has shifted the local real estate landscape from a seller’s towards a buyer’s market,” added the CADREB President.

“More than ever, whether you are buying or selling, it’s important to work with a qualified and experienced local REALTOR® to ensure that a property is priced right for the market conditions” Especially with competitive pricing due to fewer sales, the relative affordability of the Chilliwack and Area market remains attractive to buyers, particularly those from the Vancouver area.

“With the normalization of the market, even if purchases have to be downscaled a bit, it’s still a great time to buy. Real estate remains one of the soundest long-term investments a person can make”.

Chilliwack & District Real Estate Board 2018 Market Stats

 

 

http://www.cadreb.com/news-statistics/statistics-2018

 

 

Shannon Babcock Prec*
Buy Smart. Sell Smart.
Committed to Your Real Estate Success
Century 21 Creekside Realty Ltd.
Cell: 604.795.1081
Office: 604.846.7355
http://www.shannonbabcock.com
E-mail: shannonbsells@gmail.com
Twitter: @shannonbsells
President’s Club Award Winner 2008-2017

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Shannon Babcock Prec*
Buy Smart. Sell Smart.
Committed to Your Real Estate Success
Century 21 Creekside Realty Ltd.
Cell: 604.795.1081
Office: 604.846.7355
http://www.shannonbabcock.com
E-mail: shannonbsells@gmail.com
Call Shannon Babcock Prec* for all your Real Estate Needs!

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SHANNON BABCOCK PREC*
Buy Smart. Sell Smart.
Committed to Your Real Estate Success
Century 21 Creekside Realty
Cell: 604-795-1081
http://www.shannonbabcock.com
E-mail: shannonbsells@gmail.com
Twitter: @shannonbsells
President’s Club Award Winner 2008-2017