COVID-19 Update | Keeping you Informed and Up to Date

Michael Hallett • Mar 18, 2020
As most of you already know I work from my home office most of the time, so transitioning to a 100% at-home business will not be difficult for me to provide top notch service. As we move into the new normal (for the foreseeable future), I wanted to take this time to provide you with all the mortgage related announcements to date. The information is extremely fluid and changing every hour. 

For the second time in two weeks Canada’s PRIME lending rate has fallen by 50 basis points or 0.50%. Following the Bank of Canada’s emergency rate cut on Friday, March 13th lenders have decided to pass along the full savings of 0.50% to us consumers. That lowered the country’s PRIME rate, which is the basis of all floating mortgage rates (otherwise known as variable) and lines of credit, from 3.45% to 2.95%. Those of us that have variable mortgages and lines of credit are paying based on the PRIME rate of 2.95%. Since the most recent Bank of Canada rate change, we have seen lenders increase the rate discount approximately 0.50%. Instead of lenders offering PRIME minus 1.00%, most have decreased the discount to an average of PRIME minus 0.50%. Please note that the overall qualifying guidelines have not changed. We are still using the policies put in place January 1, 2018 when qualifying for a mortgage. 

I speculate it's due to supply and demand. I think they have seen a huge increase in the demand for people last week wanting to re-finance their home to leverage equity. This is putting a strain on their balance sheet. Therefore, to recuperate and meet their margins they are having to increase the rate.

TD Canada Trust came out yesterday with a collective message from the top big 6 banks in Canada. .

To summarize, they have banded together to assist personal and business banking consumers during these hard times. Below are the numbers to the customer service department should you have any questions about payment deferral.


BMO 1-877-895-3278
BlueShore 1-888-713-6728
CIBC 1-800-465-2422
CMLS 1-888-995-2657
Coast Capital 1-888-517-7000
Optimum 1-866-441-3775
Equitable 1-888-334-3313
First National 1-888-488-0794
G&F 1-866-417-2797
HSBC 1-888-310-4722
ICICI 1-888-424-2422
Manulife 1-877-765-2265
MCAP 1-800-265-2624
Merix 1-877-637-4911
RBC 1-866-809-5800
RMG 1-866-809-5800
Scotiabank 1-800-472-6842
Street Capital 1-866-683-8090
TD 1-866-222-3456
Westminster Savings 1-877-506-0100

I also recommend that you register for the applicable online portal that each lender provides. This will give your 24/7 availability and provide detailed section of FAQs 

The Prime Minister addressed the nation for a third consecutive day. Today's comments included an announcement of a major fiscal stimulus package designed to provide financial assurances to those citizens and businesses being directly impacted the covid-19 pandemic, with immediate action. As of today (March 18, 2020), the Prime Minister announced a new set of economic measures to help stabilize the economy during this challenging period. These measures delivered as part of the Government of Canada’s COVID-19 Economic Response Plan. 
 

Up to $82 Billion in direct support for Canadian workers and businesses.
Emergency care benefits for those who need to stay home due to illness
Emergency support benefits for those not regularly eligible for EI
Temporary withholding tax subsidy of 10% for small businesses employers, up to $25,000.
Tax filing deadline for individuals extended until June 1
New tax payments owing deferred until Aug 1
Boosting the GST credit and Canada Child Benefit payments 
Moratorium on student loan repayments
Boosting funding for First Nations communities, persons experiencing homelessness, and women and children fleeing violence
Much of this plan will need to be enacted by Parliament, with an expectation that payments could begin to arrive in early April.

CMHC will be purchasing up to $50 Billion of insured mortgage pools. This is expected to significantly aid lender liquidity.

CMHC will also be permitting lenders to allow mortgage payment deferrals. Canada's 6 largest banks have stated that they will be working with clients on a case-by-case basis to determine deferral solutions.

Interest rates and the bond market continue to experience volatility, and despite extensive measures designed to boost liquidity, there continues to be upwards pressure on Canadian mortgage rates at this time.

I am here to field all your mortgage related questions. My advice to current homeowners or people looking to buy, real estate is a good investment that serves a purpose. You’re not merely trading paper, but rather an essential need; HOUSING. People will need somewhere to live.

Please let’s do our part to flatten-the-curve and slow down the exponential spreading of this virus. Please stay safe.

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MICHAEL HALLETT
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Getting a Mortgage While on Parental Leave

By Michael Hallett • 01 May, 2024
Chances are if the title of this article piqued your interest enough to get you here, your family is probably growing. Congratulations! If you’ve thought now is the time to find a new property to accommodate your growing family, but you’re unsure how your parental leave will impact your ability to get a mortgage, you’ve come to the right place! Here’s how it works. When you work with an independent mortgage professional, it won’t be a problem to qualify your income on a mortgage application while on parental leave, as long as you have documentation proving that you have guaranteed employment when you return to work. A word of caution, if you walk into your local bank to look for a mortgage and you disclose that you’re currently collecting parental leave, there’s a chance they’ll only allow you to use that income to qualify. This reduction in income isn’t ideal because at 55% of your previous income up to $595/week, you won’t be eligible to borrow as much, limiting your options. The advantage of working with an independent mortgage professional is choice. You have a choice between lenders and mortgage products, including lenders who use 100% of your return-to-work income. To qualify, you’ll need an employment letter from your current employer that states the following: Your employer’s name preferably on the company letterhead Your position Your initial start date to ensure you’ve passed any probationary period Your scheduled return to work date Your guaranteed salary For a lender to feel confident about your ability to cover your mortgage payments, they want to see that you have a position waiting for you once your parental leave is over. You might also be required to provide a history of your income for the past couple of years, but that is typical of mortgage financing. Whether you intend to return to work after your parental leave is over or not, once the mortgage is in place, what you decide to do is entirely up to you. Mortgage qualification requires only that you have a position waiting for you. If you have any questions about this or anything else mortgage-related, please connect anytime. It would be a pleasure to work with you.

Bridge Financing and Deposit Lending

By Michael Hallett • 24 Apr, 2024
Let’s say you have a home that you’ve outgrown; it’s time to make a move to something better suited to your needs and lifestyle. You have no desire to keep two properties, so selling your existing home and moving into something new (to you) is the best idea. Ideally, when planning out how that looks, most people want to take possession of the new house before moving out of the old one. Not only does this make moving your stuff more manageable, but it also allows you to make the new home a little more “you” by painting or completing some minor renovations before moving in. But what if you need the money from the sale of your existing home to come up with the downpayment for your next home? This situation is where bridge financing comes in. Bridge financing allows you to bridge the financial gap between the firm sale of your current home and the purchase of your new home. Bridge financing allows you to access some of the equity in your existing property and use it for the downpayment on the property you are buying. So now let’s also say that it’s a very competitive housing market where you’re looking to buy. Chances are you’ll want to make the best offer you can and include a significant deposit. If you don’t have immediate access to the cash in your bank account, but you do have equity in your home, a deposit loan allows you to make a very strong offer when negotiating the terms of purchasing your new home. Now, to secure bridge financing and/or a deposit loan, you must have a firm sale on your existing home. If you don’t have a firm sale on your home, you won’t get the bridge financing or deposit loan because there is no concrete way for a lender to calculate how much equity you have available. A firm sale is the key to securing bridge financing and a deposit loan. So if you’d like to know more about bridge financing, deposit loans, or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you.
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