For self-employed clients, mortgage lending won’t be the same. Due to the recent changes announced by the government, minimum down payment requirements will change, making things difficult for the self-employed.
Toronto, Ontario (PRWEB) July 10, 2012
The latest amendments in Canada’s mortgage policy are one of the hottest topics on the wire these days. There are plenty of opinions thrown in support and in argument against the policy. One of the major effects will be on the home buying ability of Canadians which is cited as ‘desirable’ by the Finance minister Jim Flaherty. However, experts at Syndicate Mortgages, Canada’s leading mortgage brokerage, are forecasting more dangers that follow the decision made this June.
According to the experts at SMI, Canadian homebuyers are not the only ones affected by the new policy. Small businesses and self-employed people will also bear the brunt. While the notion is largely overlooked by major economics and industry experts, SMI substantiates the claim by bringing forward concrete and undeniable facts.
Explaining what impact new policies can have on their self-employed clients, the spokesperson for Syndicate Mortgages said, “For self-employed clients, mortgage lending won’t be the same. Due to the recent changes announced by the government, minimum down payment requirements will change, making things difficult for the self-employed. “
Incidentally, there are only few banks which currently offer flexible underwriting policies for businesses. With the new policies in effect this July, the number will further decrease and the prediction of a tougher time for self-employed will come true.
A major reason behind this is the fact that OSFI has already started to put more pressure on the lenders. The lenders are now forced to obtain more reasonable income verification from self-employed clients. “Proving their income verification may not be very easy for most self-employed personnel. Hence, the difficulties are almost inevitable,” adds the spokesperson for SMI.
Citing the negative impact of these rules and stricter underwriting criteria for the self-employed, SMI experts speculated some of the consequences. With stiffer qualification criteria by the major lenders, self-employed people would be forced to turn towards high-interest lenders instead. As a result, many borrowers will lose the ability to pay for their loans.
In this aspect, the spokesperson said, “Self-employed mortgages are generally considered to be low-default risk borrowers and making home ownership inaccessible for them through mainstream and low-interest lenders just don’t make any sense.”
In addition, SMI stressed the need for the government to take a look at the broader picture and revise the policies in order to benefit the government, market, buyers as well as businesses. Small businesses and self-employed people are among the key drivers of the Canadian economy. They don’t only contribute to employment and job creation in the region but also pay a profitable insurance premium. Anything that could obstruct their growth would also knock the whole economy off balance.
Since the speculation of new and stricter rules has hit the news this year, Syndicate Mortgages has remained at the forefront in voicing the opinion of homebuyers and Canada’s housing market on the whole. SMI has not only highlighted the major impacts of the new rules on several key entities and major economy drivers, it has also brought forward opinions, suggestions and proposals to help policymakers in making a more informed decision.
“We want the government to understand the role of self-employed, small businesses and new home buyers in the strength and stability of the economy. We are not in opposition with government but we just want to help them take a decision that proves beneficial in the long run,” concludes the spokesperson for SMI.
For more information of Canada mortgages rules and rates, please visit the website http://www.syndicatemortgages.com.
About Syndicate Mortgages Inc.
Syndicate Mortgages Inc. is one of the leading Canadian mortgage brokerage firms. Founded in 2008 in Ontario, the company specializes in residential, commercial and construction financing across Canada. With years of experience and expertise in the mortgage industry, and access to an array of lending institutions across Canada, Syndicate is known for finding the best mortgage rates for their customers. Syndicate has branch locations across Canada. For contact, please use the following details.