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CTV Morning Live: Discussing the 2020 mortgage market
Amanda checks in with Clinton Wilkins Mortgage Team to talk about the 2020 mortgage market and what consumers should expect across Atlantic Canada.
Don’t feel like watching the video? Check out the 2020 mortgage market transcript below. CTV Morning Live: Discussing the 2020 Mortgage Market
Talking about the 2020 mortgage market
Amanda: [00:00:00] We don’t need to tell you that 2020 has been a unique year, to say the least, and that’s true even when it comes to mortgages. So we’re here this morning by a mortgage expert, Clinton Wilkins. Thank you so much for joining us this morning.
Clinton: [00:00:13] Thanks for having me.
Amanda: [00:00:14] OK. So how has the pandemic affected mortgages?
Clinton: [00:00:18] Well, I think that everyone was sitting at home and they had a lot of time on their hands. So, we were actually really busy. And I think that you know, choosing an unbiased mortgage professional now has been even more important than it ever has been. One of the big reasons a lot of bank branches were closed or they had reduced hours. So, we were doing a lot of that backlog. And I mean, at the end of the day, we were able to provide that advice to the client and we still kept things rolling.
Impact of CHMC rule changes
Amanda: [00:00:42] Ok. And from what I understand is mortgage rules changed on July 1st. Can you tell us about that?
Clinton: [00:00:47] Yeah, the CMHC announced some rule changes starting July 1st. And they basically changed the rules that clients are going to have to have better credit scores. So the minimum beacon score is now 680. They’ve also reduced the extended ratios so you have to have a little bit more affordability. As well, they’ve removed the borrowed down payment, so you can’t borrow from a lot of credit or a loan or the Nova Scotia Down Payment Assistance Program anymore through CMHC. But the good news to Canadians and us in Halifax and across Atlantic Canada is there are two other insurers. There’s Canada Guaranty and Genworth. They are not following suit.
Amanda: [00:01:27] Ok
Clinton: [00:01:27] But, just one word of caution. The bulk of buyers that are getting an insured mortgage, that means less than 20 percent down, in more rural areas in Atlantic Canada were getting their mortgages insured by CMHC.
Amanda: [00:01:41] Ok. So these new rules have been in place for a few weeks. And as you just mentioned, it affects most of the buyers here in Nova Scotia. Has it been a challenge for those new buyers, these new rules?
Demand is outpacing supply
Clinton: [00:01:53] Well, I think that we saw a little bit of extra heat of demand early on. So throughout June and into July, because people were a little bit worried. You know, there’s a lot of noise in the media that there were changes happening. And you know what? We’re still getting buyers approved every single day. And I think it’s great news. You know, I think a lot of people are looking at their situation. You know, we just went through a few months of being locked down at home and maybe not in the most ideal housing situation. So we’re seeing a lot of buyers getting pre-approved and we’re seeing a lot of offers in Halifax. You know, the one challenge is there’s a limited amount of listings here and we’re certainly seeing the prices go up and we’re seeing a lot of demand on the market.
Amanda: [00:02:34] Right, it seems like there aren’t a lot of options on the market. And as soon as the home is listed, it seems to sell and it seems to sell above asking price.
Clinton: [00:02:41] Yeah, it definitely does. And that’s why a preapproval is just so, so important. And I think a preapproval is even more powerful now than it has been in the past. I can tell you, I’m hearing from realtors every day just to ensure that their clients are pre-approved because a lot of these properties are going into a multiple offer situation. And the sellers want to ensure that when they accept an offer from someone, someone, they’re gonna get their financing and they’re going to be able to meet those conditions.
Amanda: [00:03:06] Especially when you have to move so fast.
Clinton: [00:03:08] I know.
Start with a preapproval
Amanda: [00:03:08] Especially, right now. What’s your biggest piece of advice you would offer to people who are looking at buying a new home or selling their home?
Clinton: [00:03:16] Well, I think that if you’re going to buy a home, a preapproval is key. And I think really knowing what your income is, your assets and your credit and what your affordability is, and I think going in and making an offer when you have a preapproval is definitely powerful. But, it also gives you a little bit of peace of mind. You don’t want to make an offer on your dream home and then, you know, come to learn that you can’t get that mortgage financing.
Amanda: [00:03:39] Clinton, thank you so much for the great advice this morning. We really appreciate it.
Clinton: [00:03:42] Thanks for having me.
Looking for more information about the 2020 mortgage market, or other mortgage application advice? Feel free to contact us!