new mortgage rules?

[rzrgade]

What's really funny is the amount of guys buying 100,000 $ pickup trucks , that think houses are overpriced.....
Now that's hilarious.....!


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[Pinner]

Pickups got expensive when the "average Joe" started leasing vehicles because it brought the payments down, interest rates dropped, house prices went up because it brought the payments down.


I know I mentioned this before on this forum... Trucks would not cost what they cost now if people actually had to write a cheque for them, or pay 25% down at least, with 15/20% interest on top of that.

When/not if, interest rates go up the younger generation is going to suffer and have to down size.

I've worked with guys 25 years younger than me that actually have the nerve to look down at me because all their stuff, house, wheels, toys are way nicer than my stuff... MY STUFF is paid for idiot, all of it including my house and I have a pretty good RRSP.

Interest rates can only go up.

 

[NoBrakes!]

Pickups got expensive when the "average Joe" started leasing vehicles because it brought the payments down, interest rates dropped, house prices went up because it brought the payments down.


I know I mentioned this before on this forum... Trucks would not cost what they cost now if people actually had to write a cheque for them, or pay 25% down at least, with 15/20% interest on top of that.

When/not if, interest rates go up the younger generation is going to suffer and have to down size.

I've worked with guys 25 years younger than me that actually have the nerve to look down at me because all their stuff, house, wheels, toys are way nicer than my stuff... MY STUFF is paid for idiot, all of it including my house and I have a pretty good RRSP.

Interest rates can only go up.

Two way street for sure. I'm 29 and have had a lot of older generation guys laugh and look down on me for buying my 250K condo in '06 and now looking at a 500k house. "I'd never pay that haha!" Well I HAVE TO pay that... so it would be nice to do it at a lower rate for 25 years and not break me with a 20+% down payment. Let's look at inflation, I doubt you get the same for your earned 100k today that you could have got before..3% annually? Ya right. One good recent change is you can use your rrsp's as a down payment if you haven't in the last 5 years instead of "first time buyers" only, makes the 20% a little easier to cough up. Still have to repay within 15 years

 

[rzrgade]

I feel for the young people getting started , but if you are playing with a new sled & quad & truck & RV & holiday & etc etc ... House prices are not the problem , priorities are .....


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[ferniesnow]

I feel for the young people getting started , but if you are playing with a new sled & quad & truck & RV & holiday & etc etc ... House prices are not the problem , priorities are .....


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Priorities and financing.......................!!!!!!

Way too many people are way over financed. The chit will hit the fan one of these days.

 

[rzrgade]

I agree ,if the priorities were right , the over financing would not be an issue though...?!
It is way easier to get financing on a deprecating ( toys trucks etc)asset than an asset that increases in value over time ( house / real estate) ...
The banks really do not do much to HELP the uninformed, they merely take advantage of them ...IMO
It is very tough to get started these days , it takes doing with out and making the right choices early in life ..

Play now , pay later......0r
Pay now , play later!
It's all about priorities....,


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[S.W.A.T.]

2008-09 was a big eye opener for me. I was never one to finance things, of course trucks and homes are the exception but defiantly not toys or luxuries. I was brought up that if you cant afford to pay for it you cant afford it. Easy lending rates and unlimited credit for everyone is going to hurt when the hens come home to roost. I think this is a protective measure by the government in order to prevent what took place in the states 8 years ago.

 

[rzrgade]

I agree , but it is far too broad based and hurts the new buyer in most cases ...
Well I think we need to protect our housing market , keeping hard working young people away from being property owners is not the answer ... We need better screening and credit checks , help those who are responsible , and refuse the one that are not ...IMO
We need to make home ownership available to those that work hard for it ..!


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[S.W.A.T.]

When I was 19 I got approved for more then $500,000 due to the amount of money I was making and the current housing system. I didn't feel comfortable making those kind of mortgage payments and went with a $200,000 house. I think these rules will help curb situations like that and keep more realistic. I have had people working for me in the past that creditors allowed them to be financed %100. To me that's crazy. Wondering how many people got into half million dollar home 3 years ago are starting to wish they didn't.

 

[rzrgade]

So true !


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[LennyR]

Lots of good comments on this , especially guys paying $100 k for a truck and $80-100 k for an RV and then bitching that real estate costs are to high !!! And I understand what the D of F is doing , but I don't agree with it. First of all , IMO, a big part of this is an issue that the competition bureau should be looking into. Huge subtle initiative to minimize and create a situation where they start to claw back the deals that are presently being brought by independent brokers, and the basis points (commission) that they are paying out. When this happens, you're gonna see interest rates start to rise a bit , because of the decrease in competition options for consumers. Banks are basically predators when it comes to issues involving consumers, anyone who believes differently will be an easier victim.
Now you bet , I agree there needs to be checks and balances in place but this move is like killing a fly with a 12 gauge, way to much collateral damage. By far the majority of financial failures is brought about from debt outside the mortgage on principal residences, ie, lines of credit, rv loans, vehicle and Atv and vacation home loans, borrowing for holidays, furniture etc. these are the places the parameters should be tightened huge, if the goal is truly to lessen consumer debt. At worst, these changes should have been implemented regionally, cause Vancouver and Toronto probably needed these changes the rest of Canada doesn't.
This is about the big banks colluding to increase profits, disguised as an initiative to protect consumers from themselves in debt situations.

 

[sweld]

Lots of good comments on this , especially guys paying $100 k for a truck and $80-100 k for an RV and then bitching that real estate costs are to high !!! And I understand what the D of F is doing , but I don't agree with it. First of all , IMO, a big part of this is an issue that the competition bureau should be looking into. Huge subtle initiative to minimize and create a situation where they start to claw back the deals that are presently being brought by independent brokers, and the basis points (commission) that they are paying out. When this happens, you're gonna see interest rates start to rise a bit , because of the decrease in competition options for consumers. Banks are basically predators when it comes to issues involving consumers, anyone who believes differently will be an easier victim.
Now you bet , I agree there needs to be checks and balances in place but this move is like killing a fly with a 12 gauge, way to much collateral damage. By far the majority of financial failures is brought about from debt outside the mortgage on principal residences, ie, lines of credit, rv loans, vehicle and Atv and vacation home loans, borrowing for holidays, furniture etc. these are the places the parameters should be tightened huge, if the goal is truly to lessen consumer debt. At worst, these changes should have been implemented regionally, cause Vancouver and Toronto probably needed these changes the rest of Canada doesn't.
This is about the big banks colluding to increase profits, disguised as an initiative to protect consumers from themselves in debt situations.

How much did u pay for your boat?


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[LennyR]

One forecasters prediction ;

10) Rates will rise (at least in the short term).
9) Some lenders will leave the lending space.
8) Products on offer from lenders will be reduced.
7) Real estate markets will cool as more buyers are pushed out.
6) Real estate prices will decline or stabilize in many markets.
5) The rental market will heat up and rental rates will increase.
4) Consumers will be forced to stay with existing lenders come renewal (whether these lenders offer competitive options or not).
3) Refinancing will become much more difficult with fewer lenders able to provide options.
2) Non-bank lenders will come out with more dynamic non-cookie cutter lending products to maintain any market share.
1) Banks win, Canadian consumers lose.

 

[LennyR]

How much did u pay for your boat?


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Oooooh, sarcasm !!! The question is irrelevant, there wasn't financing involved in that purchase. Either one of them .

 

[sweld]

No sarcasm. Kudos to you


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[arff]

One forecasters prediction ;

10) Rates will rise (at least in the short term).
9) Some lenders will leave the lending space.
8) Products on offer from lenders will be reduced.
7) Real estate markets will cool as more buyers are pushed out.
6) Real estate prices will decline or stabilize in many markets.
5) The rental market will heat up and rental rates will increase.
4) Consumers will be forced to stay with existing lenders come renewal (whether these lenders offer competitive options or not).
3) Refinancing will become much more difficult with fewer lenders able to provide options.
2) Non-bank lenders will come out with more dynamic non-cookie cutter lending products to maintain any market share.
1) Banks win, Canadian consumers lose.

I like number 5.


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[TylerG]

I like number 5.


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You need a place in spruce Grove as a rental

 

[deaner]

Im a mortgage broker so this new policy is definitely going to hurt my business.....but I have to say I agree with it. The only people that this is going to affect are those trying to push things right to the limit which IMHO is not a good idea. For a select few it is ok under the right circumstances. For the average person though....buying at all time high prices in the real estate market at all time low interest rates, and then pushing debt service ratios right to limit is not a good idea.

 

[kimrick]

I do agree with the reporting to CRA for the capital gains when selling the primary residence to stop foreign buyers from using this loophole.
I was just glad that it is still tax free and only reportable under certain conditions which does not effect 99 percent of us canadians.

 

[LennyR]

Im a mortgage broker so this new policy is definitely going to hurt my business.....but I have to say I agree with it. The only people that this is going to affect are those trying to push things right to the limit which IMHO is not a good idea. For a select few it is ok under the right circumstances. For the average person though....buying at all time high prices in the real estate market at all time low interest rates, and then pushing debt service ratios right to limit is not a good idea.

You're right , it's gonna hurt the independent brokers business huge, it's gonna be subtle and not discussed openly even denied, but they want those 20-50 basis points back. To many options create to much competition, to many mortgage privileges. This may turn out to be a benefit to bank clients who have a lot of horsepower or are preferred customers, The way it is now the in branch people don't have a lot of flexibility on rates and privileges to differentiate between clients, even if they want to.
One of the issue I have with this whole thing is the market manipulation aspect, this is designed to affect prices, and that should in my opinion be left to supply and demand, not some government group who have proven time and time again that they react to market conditions typically 1-2 years late, if something like this was needed , it was about 18 months ago in Vancouver and Toronto, maybe a couple other places, but across the board, no way.
The other thing that I'm always amazed at is banks and mortgage insurers are the ones who approve these people who they now say are not responsible enough to keep their debt at reasonable levels, but they seemed fine when they were approving these loans and wiggling consumers debt portfolios around so that they could assume more debt, but now, now these people are irresponsible debtors and they need to be reigned in by these same people who allowed those levels to exist. Failures have happened primarily because of the Economy, losses are being experienced, from defaults on loans they approved, but of course they have no culpability, it's totally consumers fault. Cough, bull$hit, cough, this is about bank profits, plain and simple, and getting rid of the cost of mortgage brokers and the competition they bring to mortgage rates.