Spring cleaning your debt could save you thousands!

Wouldn’t spring cleaning be so much more gratifying if – somewhere under dusty barbecue parts and outgrown hockey skates – you found an envelope with, say, $5,000 in cash? Wouldn’t that make spring cleaning worthwhile? Of course it would!

Well, you may not uncover a financial windfall when you’re cleaning the garage this spring, but a little time and attention to the task of spring cleaning your financial house can be very rewarding. This spring, dust away the cobwebs and take a hard look at your debt servicing costs.

Are you continuously carrying a large monthly balance on your credit cards? Take some comfort in knowing that you’re not alone. However, this particular kind of financial clutter – ongoing, unsecured consumer debt – is both confusing and costly. Guess what? It’s time to spring clean your debt!

Begin by making a quick list of the interest you are being charged on your loans, credit cards or other unsecured debts. What are you paying in debt servicing costs? Do you have tax bills piling up? Don’t forget to include that debt in your spring cleaning project.

Next, take a look at our historically low mortgage rates, and make an appointment with a mortgage professional for a review of your situation. You have a golden opportunity right now to give yourself a tremendous financial boost. By rolling your other debt into a mortgage – either new or existing – you can reduce the number of payments you’re making each month, save big on interest costs, be mortgage free quicker, and greatly improve your cash flow. Most of all, you’ll be able to start building wealth.

Worried about penalties? Don’t think it can make much difference? Think again. It can be as good – or better – than finding the $5,000 envelope of cash in your garage. Why? As an example, assume you have a $175,000 mortgage at 4.5%, high interest credit cards and other loans of $50,000, and a total monthly payment of $2,119. Now if you took that $225,000 and added on an approximate $8,000 penalty to refinance your mortgage, you could roll that $233,000 into a 3.5% mortgage (OAC, rates subject to change) that would reduce your overall monthly payment to $1,163. That’s a monthly savings of $956. Your monthly payment has been reduced, you’re saving on interest charges, and all of your high interest credit card debts are gone. Imagine if you funneled some of that cash flow back into your mortgage, or invested in RRSPs, TFSAs, or RESPs!

Regardless of where you are in the life of your mortgage, if you have equity in your home and your cash flow has slowed to a trickle because of your debt, talk to a mortgage professional who can analyze your situation and outline your spring cleaning options.

So as you polish the windows, shake out the carpets and clear out the garage, don’t forget the most rewarding task of all: spring cleaning your debt. Your financial house will enjoy the fresh beginning too!

Financing for New Immigrants to Canada

A Home of Their Own – New Immigrants Face Hurdles

New Canadians are making their numbers felt in the housing market, as they get settled and make the transition from renter to owner, purchasing their first homes in this country.

Over 280,000 new immigrants arrived in Canada in 2010, the highest amount in 50 years according to the Department of Citizenship and Immigration. Immigrants are expected to play a large role in the housing market in the coming decades. Between now and 2031, the foreign-born population of Canada could increase approximately four times faster than the rest of the population.

For these new Canadians, first-time home ownership may prove harder than anticipated, as they face some unforeseen obstacles, but there are definite opportunities.

Lack of Credit History
The biggest challenge for new immigrants is establishing credit because they do not have a financial history in Canada.

Without a credit history, it can be a struggle to get mortgage financing. It is important to start establishing credit soon after arrival in Canada. New immigrants are encouraged to bring credit and bank references (preferably in English) with them from their home country to help with developing a Canadian credit profile.

Large Down Payments
Another home ownership hurdle immigrants have faced is that many financial institutions traditionally have insisted that new immigrants provide a down payment of at least 25 to 35 per cent. A large down payment may be difficult for some because they are self-employed and working to establish their own business or unable to access funds from their home country.

The good news is that things are changing. More and more lenders in Canada are offering mortgages tailored to the needs of new immigrants, including those with non-landed status. In many cases, immigrants can get a mortgage with a down payment of as little as five per cent of the value of the property, as long as it comes from their own resources.

To start preparing to apply for a mortgage, the following materials should be assembled:
• Copies of your work permit/landed status papers or passport
• Social insurance number
• Employment letter(s)
• Credit reference(s)
• Documentation of the down payment money source
• Bank statements showing 90 days of account activity

The great news is that mortgage brokers can streamline the mortgage process for new immigrants, from counseling on credit in Canada, to obtaining credit references from foreign banks, to confirming foreign income; a broker can work with new immigrant clients to present their financial history to the satisfaction of the lender.
 

Should you take a Five year or Ten year mortgage?

In today’s low rate market the choice of whether to take a 5 Year Term or a 10 Year Term is certainly a topic to be discussing with your clients.  The easiest way to present and compare these 2 scenarios is with cold hard numbers.  The more you provide and educate your clients on the 5 Year vs 10 Year scenario the more they may be leaning toward a longer term.

• Payment $2,101/month for years 1-5 and $2,712/month for year 5-10
• Outstanding balance at end of year 5 - $444,301 and at the end of year 10 – $396,260
• Payment shock/increase at the end of year 5 = $611 (so your payments will increase by this amount when your rate goes from 2.99% to 5.50%)

• Payment 2,346/month for 10 Years
• Outstanding balance at end of year 5 – $451,198 and at the end of year 10 – $392,029
• Payment shock/increase at the end of year 5 = $0

With this strategy, you have given the client some flexibility with their mortgage, the security of a 10 year term and the potential to save in the long run. So for a 5 year term to be better, rates are going to have to stay very low over the next 5 years which, nobody can predict, but it does not seem likely so why take the risk.

Home Buying 101

What eager first-timers need to know before the house hunt

You’ve saved for your down payment, you’ve crunched the numbers and you’ve decided on the neighbourhood where you want to live – but are you really ready to start shopping around?

“Buying your first home is one of life’s most exciting milestones, but there are lots of steps on the way to crossing the threshold as an owner for the first time,” says Monica Peckford of Invis. “To make sure this process goes smoothly, you’ll need to get financing advice right from the get-go and do some work in advance.”

Peckford of Invis breaks the process down with the following tips:

Get your down payment and deposit ready. A down payment must come from your own resources, and in most cases must have been held in your account for at least 90 days. Using a gift from your parents or other family member for a down payment? You’ll need a letter stating that it is actually a gift and does not need to be re-paid. These funds will likely need to be deposited in your account two weeks before your purchase closing date.

The Home Buyers’ Plan is another financing option for first-time buyers. It allows you to withdraw up to $25,000 ($50,000 per couple) from your RRSP to buy or build a home.

Keep in mind that when placing an offer, a deposit is usually required. It can be all, or part, of a down payment.

Figure out what you can afford. The best way to do this is by talking to a mortgage expert and getting pre-approved for a mortgage. A mortgage broker can provide examples of what monthly payments and home buying costs will be, to eliminate surprises.

“A major benefit of a pre-approval is that most financial institutions will lock-in a rate for up to 120 days,” advises Peckford. “This is very helpful if you’re buying in a rising rate environment.”

Get in touch with the professionals. Think of home buying as a team sport – a mortgage broker can help you find a good real estate agent, real estate lawyer, home inspector and home insurance agent. Be sure to get in touch with these professionals early in the buying process to avoid last-minute scrambles.

Choose your mortgage strategy. Ask yourself: Do I want the stability of a fixed-rate mortgage or am I comfortable with the potential rewards and risks of a variable-rate loan? A mortgage expert can help you decide which one makes the most sense for your financial situation, as well as help you understand your payment options and the other features of various types of mortgages.

Get ready to close. When buying a home, it pays to learn about closing costs, which can represent up to 3 per cent of the purchase price, including land transfer tax, lawyer’s fees, appraisal fees, title insurance and home inspection fees. A mortgage professional can help estimate how much these will cost and offer ideas for how you can cover these costs.

”A lot of first-time buyers can’t wait to get out there and house hunt, but they need to understand that this is not a decision to enter into lightly,” says Peckford. “But with careful planning and expert advice, you can make your first home – and your first mortgage – work well for you in the long term.”

THE ADVANTAGES OF LEASING

Leasing equipment provides many advantages for the business owner. In fact, leasing is used by 80% of all companies to acquire some or all of their depreciating assets. Here’s why:

A Home of Their Own, New Immigrants face hurdles

New Canadians are making their numbers felt in the housing market, as they get settled and make the transition from renter to owner, purchasing their first homes in this country.

Over 280,000 new immigrants arrived in Canada in 2010, the highest amount in 50 years according to the Department of Citizenship and Immigration. Immigrants are expected to play a large role in the housing market in the coming decades. Between now and 2031, the foreign-born population of Canada could increase approximately four times faster than the rest of the population.

For these new Canadians, first-time home ownership may prove harder than anticipated, as they face some unforeseen obstacles, but there are definite opportunities.

Lack of Credit History
The biggest challenge for new immigrants is establishing credit because they do not have a financial history in Canada.

Without a credit history, it can be a struggle to get mortgage financing. It is important to start establishing credit soon after arrival in Canada. New immigrants are encouraged to bring credit and bank references (preferably in English) with them from their home country to help with developing a Canadian credit profile.

Large Down Payments
Another home ownership hurdle immigrants have faced is that many financial institutions traditionally have insisted that new immigrants provide a down payment of at least 25 to 35 per cent. A large down payment may be difficult for some because they are self-employed and working to establish their own business or unable to access funds from their home country.

The good news is that things are changing. More and more lenders in Canada are offering mortgages tailored to the needs of new immigrants, including those with non-landed status. In many cases, immigrants can get a mortgage with a down payment of as little as five per cent of the value of the property, as long as it comes from their own resources.

To start preparing to apply for a mortgage, the following materials should be assembled:
• Copies of your work permit/landed status papers or passport
• Social insurance number
• Employment letter(s)
• Credit reference(s)
• Documentation of the down payment money source
• Bank statements showing 90 days of account activity

The great news is that mortgage brokers can streamline the mortgage process for new immigrants, from counseling on credit in Canada, to obtaining credit references from foreign banks, to confirming foreign income; a broker can work with new immigrant clients to present their financial history to the satisfaction of the lender.
 

The BC First Time New Home Buyer's Bonus.

How to buy a fixer upper?

Many homebuyers looking at older properties find themselves in a common predicament: they’ve found a property that suits them, but it needs some costly and immediate upgrades.

Many buyers add the costs of those immediate renovations into their mortgage, instead of racking up credit card bills or selling investments to pay for the upgrades. Known as a “purchase plus improvements” mortgage, this type of mortgage covers the sale price of the home, plus any renovations that would increase the value of the property , with as little as 5 per cent down.

If you’re buying a home but want to add a second storey, finish a basement or redo a kitchen, it can make a lot of sense to add those costs to your mortgage. That way you can spread your payments over the life of the mortgage and have a cost-effective way to get your dream home. You can also use your pre-payment privileges to pay the renovation off faster. The process is quite simple:

Obtain cost estimates for the upgrades. Once you have found a home, you need to get detailed written quotes from licensed contractors on the renovations you plan, outlining the scope and all costs.

Get your appraisal. An appraisal with two separate values will sometimes be required: first the value of the property “as is” and the estimated value of the property once the improvements are completed. Discuss this step with your mortgage consultant as it is not always necessary.

Renovation costs are included in your mortgage. Your lender will add the estimated costs of the renovation into your mortgage. For example, with a 5% down payment, your mortgage broker would apply for 95% of the “as improved” market value, which will be higher than the actual purchase price. The committed amount of the mortgage will be advanced to your solicitor, who will be instructed to hold back the renovation funds until the work has been completed and inspected.

Complete your upgrades; funds are released upon completion. Once an inspection from an appraiser confirms all work is complete and a copy of the building permit (if applicable) has been received, the balance of the mortgage funds will be released to you to pay for the renovations. Depending on the lender, you may also be asked to provide copies of receipts and invoices for the work done. There are a few options for carrying your expenditures until the funds can be released. Some major home improvement retailers offer “no payment” options for up to six months.Larger contractors may also be willing to finance the project short-term if they see the documentation for purchase plus improvements financing.

Example:

Purchase price: $400,000

Improvements: $40,000

Total mortgage: $418,000 (95% of $440,000)

$378,000 will be released on closing date. $40,000 will be released upon completion of improvements i.e. improvements are 100% complete and a final inspection has taken place.

Be sure to consult with a mortgage professional to learn about the full range of options available to you when purchasing a fixer upper.

Tips for Paying off your Mortgage Faster

For most homeowners, paying off their mortgage quickly – so that they own their home free and clear – is a top priority. Paying down additional principal during the first years by a variety of means can shorten the mortgage — and dramatically lower the amount of interest you will end up paying over the life of the financing. Here are a few ways to make this happen:

• Consider making lump sum prepayments. Most lenders will allow you to do this on the anniversary date of the mortgage.
• Use your tax refund to make mortgage prepayments. Instead of spending your tax return, invest it in your financial future by putting it toward your mortgage.
• Consider making bi-weekly or weekly mortgage payments. This strategy can add the equivalent of another monthly payment each year, which can add up over the life of the mortgage.
• Round up your payments. Even a few extra dollars each month can amount to significant savings over the long term.
• Increase the amount of your payments when your income rises. The trick here is to keep your lifestyle generally at the same level as before, while concentrating on debt reduction.
• Ensure that your payments are as large as you can afford. Try tracking where your discretionary income goes each month – you may find room to increase your regular mortgage payment, or make a lump sum prepayment.
• For some variable rate mortgages, keep your payments the same size when rates go down. This allows you to put the savings associated with a lower rate towards the goal of principal reduction.

Explore your Options with Invis Online Calculators

I would be happy to discuss your individual mortgage strategy. As a supplement to my consultation with you, there are also a range of helpful calculators on the Invis website which allow homebuyers and homeowners to explore different mortgage scenarios. In particular, the Mortgage Payoff, Bi-Weekly Payment, Mortgage Analyzer and Debt Payment Accelerator calculators can help you understand the financial benefits of paying down your mortgage as quickly as possible. In addition, the home budget calculator can help you to track your spending patterns in order to increase your mortgage payments.

How to Buy a Mobile Home

You have decided to purchase a mobile home as an economical way of buying a home. You find a unit in a mobile home park that meets your needs. You have done some preliminary research on line and discovered that current mortgage rates are 3.39% for a 5 year term. You are thinking that on a purchase of $70,000 with a down payment of $10,000, the monthly payment would be approximately $300 per month. Add to that the pad rental of $350 per month gives a total monthly amount of $650.00.

You decide to take the search to the next level and get pre approved. You go to your local bank and discover that for mobile homes in parks, the bank doesn’t discount the rate and actually charges a premium over and above the current posted rate of 5.24%. The lender also says that the age of the mobile home can affect the amortization period. An older home would possibly be amortized over 15 or 20 years as opposed to the 25 years that you based your calculations. This could increase the payment upwards from the $300 per month you thought it would be. The lender also advises that they require a consent form signed by the park owner and that some parks have issues with these forms and don’t like to sign them.

You decide to ask the banker what you would qualify for on a mobile home that has it’s own land. The banker advises the rate would be the posted rate and amortization will depend on the age of the home. Based on 25 years you would qualify for $130,000. You know that the cost would be more than this amount so you think that this in not an option.

After more reflection, you decide to call an Invis mortgage broker recommended by a friend. The broker advises that the banker is correct regarding mobile homes in parks. They are not easy to finance. The broker does advise however that there are lenders who will lend on mobiles on their own land with discounted rates in the 3.39% range. Given the lower rate you would now qualify for approximately $170,000 with a payment of $770 per month. The broker explains that you may receive a 30 year amortization if the mobile home is updated and renovated. Given your income, down payment and the longer amortization period, you would now qualify in the $200,000 range and the payment would be approximately $1000 per month. the broker explains that they have access to over 50 lenders and their plans and have at least 3 lenders who would consider a mobile home on land at the lowest rate and more if the home is modular.

You are now working with a Realtor and obtaining your mortgage from an Invis mortgage broker!

The Mortgage Broker Advantage

Increasingly, Canadians are turning to mortgage brokers for their first and next mortgage, taking advantage of the value and convenience of their services. A 2011 study conducted by CMHC (Canada Mortgage & Housing Corp) found that 48 per cent of first-time buyers completed their transaction with a mortgage broker, up from 45 per cent in 2009 and 35 per cent in 2007.

One of their most compelling reasons to work with a mortgage broker is that they have access to a wide range of lending sources, making it significantly easier to match borrowers with the mortgage product that best suits them. When you’re dealing directly with one financial institution, you just don’t know if you’re getting the best deal because they’ve only got their own menu of products to offer you.

If you are dealing with one of the largest mortgage brokers in the country, you’ll also enjoy considerable bargaining power. A large brokerage has clout with lenders to negotiate volume discounts that lead to lower rates and greater product choice than other companies. And, brokers are generally paid by the lender rather than the borrower, making it a logical choice to always consult with a mortgage broker. They’re shopping the market for the best rates, doing all the work, and there’s no cost to you.

But a mortgage broker’s role extends beyond securing financing – to arranging the home appraisal and lawyer or notary, reviewing the purchase contract and statement of adjustments, securing mortgage life insurance, and keeping tabs on the entire closing process. And that’s just during the mortgage transaction. The broker then stays in touch, keeping clients apprised of new mortgage offers and rate fluctuations, and advising when to lock in a variable-rate mortgage.

Ultimately, the role of your mortgage broker is that of a trusted advisor and it’s a relationship that can last a lifetime. Many mortgage brokerage clients have been referred by word of mouth, and many are even second- and third generation client families.

Whether you’re taking on your first mortgage or a long-time homeowner looking to refinance, consolidate debt or leverage your equity to acquire a new property, a mortgage broker is a wealth of information. They can advise about down payment requirements, mitigating credit history issues, mortgage payment and prepayment options, interest-saving strategies, purchasing vacation, investment and commercial properties, qualifying with supplemental rental income, and mortgage options for new immigrants.

When you get a mortgage, likely the biggest financial commitment you’ll make in a lifetime, it’s critical that the person you’re dealing with is knowledgeable, able to answer your questions, and has access to a full range of lenders so you get the best mortgage for your needs.

We are here to help! Call Invis West Coast Mortgages today for a free no obligation consultation.

Some areas I specialize in

1. New Construction Mortgages – We are very experienced in financing new constrution. We can accomodate progress draws if required. Home can be contractor build or owner build. We will guide you through the whole construction/advancing process. If you are interesting in building a home come and see us!

2. Need Credit Repair – If you have gone though a rough patch and your credit has been affected, we can help. We have access to private funds when you are unable to qualify for a traditional mortgage. We can help you take the necessary steps to repair your credit and then find you a traditional mortgage at “A” rates. Ask us how we can help.

3. Reverse Mortgages - If you are age 55 or over and are finding that your pension income isn’t enough, use the equity in your home to boost your income. A reverse mortgage does not have to be paid back until the home is sold. The funds can be used for whatever purpose you want. It can make the difference for a lot of retirees and allow them to stay in their homes a lot longer. We can show you how to increase your monthly income. Ask us how we can help.

4. Leasing – If you require equipment for your business, sometime it makes sense to lease it. Whether it is vehicles or computer and office equipment we can assist you with leasing. Use your cash to buy assets that will appreciate in value over time like real estate and lease the depreciating assets. Makes business sense. Ask us how we can help.

5. Life Insurance – Mortgage insurance is a low cost way to make sure that your mortgage doesn’t become a burden to your family in a time of crisis. We can offer life insurance, disability insurance and critical illness insurance. You never know what the future will hold so make sure your loved ones are protected. Ask us how we can help.

These are a few of the areas we specialize in. Call us anytime for a no obligation consultation.

Mortgage Options for self employed

Are you self employed and does your accountant do too good of a job writing off income? We all want to pay less income tax and that is one of the reasons we employ accountants. They can work their magic so a good portion of self employed earnings are written off against eligible expenses. This is awesome! But where this practice can get tricky is when you go to your bank and want to borrow money to purchase or refinance a home. They tell you that you don’t show enough earnings on your tax return to qualify for a mortgage.

The government has tightened up policy on mortgage qualifications for self employed recently as well, making it harder than ever to qualify. No more 5% down payment, self employed individuals must have 10% down now in order to take advantage of a self employed program. No more automatic approvals if you simply prove self employment and have a good credit score. Things are a little more difficult and involved, but we at Invis can help.

There are still options available to help self employed individuals obtain mortgages. If you need help finding a mortgage due to self employment or hard to prove income, call us at Invis West Coast Mortgages for a no obligation consultation. We can find the right program with the right lender for you. These programs are still out there even though there has been some changes, we know where to look! Call us today!

A peek behind deeply discounted five year rates

When considering a deeply discounted 5-year rate, keep in mind that cheapest isn’t always best. Strangely, we know that’s true when we’re shopping for anything else – but we still tend to believe that lowest rate is the one and only factor in choosing a mortgage. But, that low-rate mortgage could actually cost you more in the long run.

An amazing cut-rate mortgage could have you locked in to a very rigid contract filled with financial “trip lines” that could work against you down the road. That’s why it’s important to check the fine print. For instance, is the mortgage fully closed? That means you’re not leaving the lender unless you sell your house, so your options are limited and you have no negotiating power if your needs change in the next 5 years. Low or no prepayments: means you have no or limited ability to chip away at your principal to reduce your overall cost. Maximum 25-year amortization can take away flexibility you may need later. Many prudent homeowners take a 30-year amortization but set their payments higher using a 25-year or lower amortization. This gives them the option to reduce their payments should an emergency arise or a special need like maternity leave. For first-time buyers too, a 25-year amortization means higher payments than a 30-year amortization and could limit their entry into the market.

Spot a deeply discounted 5-year rate? Talk to us first. We’ll always help you find the right combination of low rate with the options you need to achieve your goals for homeownership and the financial future you want.

Vancouver condo market on watch list as real estate balloon deflates

Canada’s housing market is not a bubble, it’s a balloon. And unlike the catastrophic decline the U.S. housing market experienced in 2008, the market in Canada will deflate slowly rather than pop, according to a report by BMO Capital Markets.

The sole possible exception is Vancouver, where the number of unoccupied condominiums is high due to building the Olympic Village, economists Sherry Cooper and Sal Guatieri wrote in “Will Canada’s Housing Boom Forge On, Fizzle Out, or Flame Out?”

But generally, the report says that despite rising household debt, low interest rates and rising home prices, it is unlikely that a sudden correction will take place.

“The main take-away is that the national housing market appears some-what pricey, but is far removed from bubble territory,” the report stated.

It compares average resale prices with median family incomes and finds the ratio is 4.9 nationally, compared to 3.2 a decade ago.

In Vancouver, though, where house prices have gone up 159 per cent in the last 10 years - compared to 104 per cent nationally - the ratio of price to income is 10, nearly double what it was a decade ago, the report said. Victoria is also high, at 5.7, but not as high as Toronto, which has a price to income ratio of 6.7.

Montreal has also seen prices rise dramatically - by 153 per cent - and its price-to-income ratio double, but that ratio remains low at 4.5.

Despite rising home prices in most of Canada’s major cities, the growth doesn’t seem to be excessive, the report said. But elevated valuations could lead to trouble in the event of a shock.

For example, if interest rates were to spike by about four percentage points, the affordability of homes would quickly drop throughout the country. A severe recession would also affect affordability.

But the chance of either of those events happening is unlikely, the report authors stated. Also, except for a few markets, the national housing boom has already cooled.

And British Columbia is now “the nation’s new weak spot, with prices generally declining,” the report said. Some of that decline reflects fewer sales of high-end homes.

“[But] some real underlying softness is at play, and will likely continue until valuations improve,” the report stated. Tsur Somerville, director for the Centre for Urban Economics and Real Estate at the Sauder School of Business at UBC, said BMO’s report is one of many predicting slight drops or slight increases in the housing market rather than a major correction.

“The kinds of things you need to get major corrections, like oversupply or radical change in the financing environment, just aren’t there,” Somerville said. And just because the overall market will be flat, it doesn’t mean that certain portions of it - such as areas that have had higher run-ups in prices over the past few years - aren’t in for a correction, he said. Helmut Pastrick, chief economist with Central 1 Credit Union, believes that while there may be a soft landing at some point in the future, it won’t be in 2012.

“The market is holding up generally well and it looks like 2012 is going to be fairly similar to 2011 in terms of overall unit sales,” Pastrick said. “Housing prices will go up by some amount, sales will also increase by a small amount.” And while the economy isn’t booming, it is growing, interest rates are low and there is job growth, he said. “So the conditions to me aren’t ripe for a correction.”

Meanwhile, Bloomberg reported that Canada’s banking regulator fears that Canadian lenders are loosening standards on mortgages that are similar to U.S. subprime loans, posing an “emerging risk” to financial institutions.

Banks and other lenders are becoming “increasingly liberal” with mort-gages and home-equity credit lines that don’t require individuals to prove their income, according to documents obtained by Bloomberg under freedom of information law request from the Office of the Superintendent of Financial Institutions.

“Non-income qualified” lending has been added to a list of issues to be considered by OSFI’s “emerging-risk committee,” Bloomberg reported the documents showing. Pastrick disputes this finding. “We’re not subprime, not by a long shot,” he said.

Lenders in Canada have “credible lending criteria and standards.” And while lenders will lower rates to grab market share “credit isn’t easy like it was in the U.S.,” he said. Somerville believes the problem is with home equity lines of credit which have become more popular over the year and don’t always require income verification.

Not only are lines of credit given out without the same level of super-vision or the same standard of care that is applied to mortgages, they are also junior in seniority to mortgages, Somerville said.

Read more: http://www.canada.com/business/Vancouver+condo+market+watch+list+real+estate+balloon+deflates/6073340/story.html#ixzz1l3d5QmCN