Questions about getting a mortgage? Want to know how the mortgage changes will impact you? We sit down with Petra Evans, Home Financing Advisor from Scotiabank to get an update.
Click Play to see what she has to say or reach out to her today and have a chat.
(Don’t have time to watch it all? Below the video is a quick run through of what is discussed and at what point so you can skip ahead!)
0:58 | What info should clients be bringing to you when they are ready to start talking about mortgages?
2:35 | What paperwork will clients be required to bring when looking for a mortgage approval?
4:36 | Working at a bank, what can you offer someone with more complicated mortgage needs?
7:01 | What makes you so awesome?
8:13 | What are the recent changes in the mortgage industry and how will they impact clients?
Conversation Summary
What info should clients be bringing to you when they are ready to start talking about mortgages?
Firstly I would like to say it’s never too early to start planning, whether you are thinking about moving, or you are a first time home buyer, the prepping and planning is all part of the process. Times have changed in the approval process and it’s much different than what you may have experienced in the past, you want to make sure you are approved.
Secondly, when meeting with me I provide my clients with an email with an attached appointment card, prior to the appointment, allowing them time to collect necessary documents. This clearly outlines the different sources of income to provide depending on your employment. So for example, if you are salaried full time employee vs a Self Employed, the documents will be different. This is a great guide that clients can use to refer back to when collecting the pertinent papers.
What paperwork will clients be required to bring when looking for a mortgage approval?
This depends on whether you are a salaried employee or self-employed, and various for each person. Generally though, a salaried employee must have a letter of employment and the two most recent pay stubs. For self-employed individuals, T4A’s from the last 2 tax years help us determine an average income. All these requirements will be outlined in the appointment card to make it easy to navigate.
Working at a bank, what can you offer someone with more complicated mortgage needs?
Clients with more complicated needs still need to be provided direction and advice, maybe more than other’s applications if it’s complicated or untraditional. If we step back to that pre-approval piece for a second, again this really confirms and gives the clients piece of mind that the application has been fully adjudicated and underwritten, meaning that we have taken more time up front, collecting and structuring the application, versus after an offer has been put in and stressing out, wondering if the income will been satisfied. I offer more of a hands on approach, and fully invest in the client’s approval, and take the time to ensure it is done right the first time. If the applicants do not fit within Scotiabank’s guidelines, then Scotiabank has fully vetted and trusted Alternate options we can provide the clients all in one stop.
What makes you so awesome?
My role is unique as I am mobile and can meet clients at their convenience, whether it’s at their work office, home or at a branch. I have been in the financial industry for 22 years, so lots of knowledge and experience I bring to the table.
What are the recent changes in the mortgage industry and how will they impact clients?
Well the change is pretty simple… whether you have 5 or 20% as a down payment you now have to qualify at a higher qualifying rate. So let me tell you what I mean…
If you are putting less than 20% down payment you will have to qualify at the current Bank of Canada 5 year fixed rate, which is currently sitting at 5.14%. That is not your actual contract rate, but what you qualify for.
If you are putting more that 20% down payment, then what ever term or contact rate you have been offered, add 200 basis points to that rate and there’s your qualifying rate. So in this example, if the rate being offered is 3.49% for 5 years, then the qualifying rate will be 5.49%.
This implementation as of Jan 2018 has so far had minimal impact. Sales continue to be strong and minimal impact to the market in terms of transactions. This process wasn’t put in place to slow down the market or mortgage transactions, but essentially to ensure the clients can afford future higher mortgage rates, with the higher home purchase prices, as expected.
Again this just confirms more so than ever that clients should be seeking the pre-approvals and confirming what they qualify for. Clients should be seeking the mortgage advice from a specialist like myself for qualifying and obtaining the right expectations of affordability.
*Click here for all Petra’s contact information