Welcome!

By registering with us, you'll be able to discuss, share and private message with other members of our community.

SignUp Now!

Mortgage renewals

Willyboy

Frequent Forum Member
Registered
Joined
Aug 19, 2016
Messages
115
I just came across article by a mortgage broker where they say they heard from some people that they have not been offered an automatic renewal offer by the lender they have been with and those people are asking the mortgage broker for advice.
The mortgage broker says it may be a possibility in the future that lenders start ignoring existing clients at renewal time if something changes even if they sill keep making their monthly payments.
Anyone heard something like that?
 

Thomas Beyer

0
REIN Member
Joined
Aug 30, 2007
Messages
13,881
Yes some banks do not auto-renew. A MAJOR issue in Alberta if you own too many highly levered rental properties due to rents that have fallen 20-30% from 2014.

Brought to you by the Liberal government to protect the middle class ( or was it banks’ profits?)


Sent from my iPad using myREINspace
 

Michelle918

New Forum Member
Registered
Joined
Sep 7, 2007
Messages
7
Yes, I have heard this happening. A few of my real estate friends had that happen to them and they never missed a payment. They were taken by surprise and a few of them it did not end well. (Forclosure did happen)

I have mainly stayed with top 5 banks and credit unions, making extra payments over the years.

RBC pulled a fast one on me this renewal in the summer of 2017. They reduced my term from 20 years to 15 which increased my payments by about $400 per month. This put me in a negative cash flow situation. Eventhough my interest rate went down. There was nothing I could do about it. (Note: In 2012, I had extended it to the orginal 25 years, 5 years prior to help with cashflow)

Keep in mind...He who has the cash makes the rules.The banks have the upper hand at the moment....and they know it.

You must get contact with the lender and make sure you get it in writing, if they say they will renew. Make sure you have a back up plan if they do not renew. BE VERY PROACTIVE.

I agree with Thomas Beyer. Thank you, Liberal government for the wonderful economic conditions.

Sent from my SM-N900W8 using myREINspace mobile app
 

Conrad5

Inspired Forum Member
REIN Member
Joined
Jan 30, 2008
Messages
131
Has anyone seen this happen in Ontario in the last twenty years?

No part of Canada is exempt. Happening more in Ontario than anywhere else in Canada. Lenders and Banks are pulling credit, reviewing original documents submitted at the time of purchase and looking at other factors irrespective of the subject mortgage payment history before issuing renewal letters these days.


Sent from my iPhone using myREINspace
 
Last edited by a moderator:

KeithnCalgary

Mortgage Associate & REIA
REIN Member
Joined
Mar 21, 2011
Messages
154
This is why investors need to maintain their relationship with a mortgage broker that has access to lending products that could prevent foreclosure.

If you know an investor that needs help have them contact me.

We have a rental property lender that will use stated income and 100% rental offset.

Keith Uthe,
Mortgage Alliance Enrich Mortgage Group
[email protected]

Sent from my SM-G935W8 using myREINspace mobile app
 

Willyboy

Frequent Forum Member
Registered
Joined
Aug 19, 2016
Messages
115
This is why investors need to maintain their relationship with a mortgage broker that has access to lending products that could prevent foreclosure.

If you know an investor that needs help have them contact me.

We have a rental property lender that will use stated income and 100% rental offset.

Keith Uthe,
Mortgage Alliance Enrich Mortgage Group
[email protected]

Sent from my SM-G935W8 using myREINspace mobile app

Hi Keith. I have asked all the mortgage brokers I've seen at the banks about just one particular thing so my question to them was the following:
if I am approved today and buy a property but at the end of the 5 year term if I am unemployed but everything else is good will you renew my mortgage?
Their answer: no problem here. You will get an automatic renewal letter by mail. We will not check on you again as long as you have been making your payments on time.

Your comment please. Is what I heard from them correct?
 

Thomas Beyer

0
REIN Member
Joined
Aug 30, 2007
Messages
13,881
This is why investors need to maintain their relationship with a mortgage broker that has access to lending products that could prevent foreclosure.

If you know an investor that needs help have them contact me.

We have a rental property lender that will use stated income and 100% rental offset.

Keith Uthe,
Mortgage Alliance Enrich Mortgage Group
[email protected]

Sent from my SM-G935W8 using myREINspace mobile app

Hi Keith. I have asked all the mortgage brokers I've seen at the banks about just one particular thing so my question to them was the following:
if I am approved today and buy a property but at the end of the 5 year term if I am unemployed but everything else is good will you renew my mortgage?
Their answer: no problem here. You will get an automatic renewal letter by mail. We will not check on you again as long as you have been making your payments on time.

Your comment please. Is what I heard from them correct?

It’s a blatant lie.

Banks always had the right to call the mortgage due after the term is up. Nothing really has changed except IN PRACTICE TODAY THEY DO .. or do it far more frequently. Owning real estate today is thus far more risky, especially for rental properties.

Cash is vital for real estate, as is access to credit. This access is heavily throttled now by our socialist fools running this formerly fine country, if country or nation actually still means anything these days anymore. What does it mean to be “Canadian” beyond progression from multiculturalism, proclaimed by Pierre Trudeau about 45 years ago, as “the greatest hotel in the world” ? http://nationalpost.com/opinion/joe-oliver-our-post-national-prime-minister

Talked to a fellow real estate investor friend last week in Edmonton with a significant portfolio and she has to unload several to free up cash as banks start squeezing and renewals now far FAR more difficult.

Change is hopefully coming, but until then PLEASE keep some significant cash handy.

First change in June in Ontario and then in May 2019 in Alberta, and perhaps even winds of change on the federal level in fall of 2019 as 58% now disapprove of our prime minister https://www.spencerfernando.com/2018/04/28/58-of-canadians-now-disapprove-of-justin-trudeau/
 
Last edited:

Thomas Beyer

0
REIN Member
Joined
Aug 30, 2007
Messages
13,881
We have a rental property lender that will use stated income and 100% rental offset.

Would like to know more about 100% rental offset.

Basically they allow you to add 100% ( as opposed to only 50% say ) of your net rental income to your other (employment) income


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 

Thomas Beyer

0
REIN Member
Joined
Aug 30, 2007
Messages
13,881
Basically they allow you to add 100% ( as opposed to only 50% say ) of your net rental income to your other (employment) income


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com

Does that come with higher than normal interest rate, as the risk for the lender would be higher?

Bingo


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 

angelapeng

0
Registered
Joined
Aug 19, 2011
Messages
183
Interesting to know that some lenders start not to renew the mortgages. Do anybody know what is the rational behind their decision? Will the existing lender treat the renewal as a new purchase, meaning has to qualify the borrower and subject property? I used to have short to medium term mortgages say 1, 2, or 3 years. If this trend of tightening the renewal continues, do we need to consider a longer term mortgage, say 5 plus years?
 

Thomas Beyer

0
REIN Member
Joined
Aug 30, 2007
Messages
13,881
Interesting to know that some lenders start not to renew the mortgages. Do anybody know what is the rational behind their decision? Will the existing lender treat the renewal as a new purchase, meaning has to qualify the borrower and subject property? I used to have short to medium term mortgages say 1, 2, or 3 years. If this trend of tightening the renewal continues, do we need to consider a longer term mortgage, say 5 plus years?
Lenders can get higher rates if they auto-renew unreviewed. Some lenders go that route. Others just wish to weed out more risky borrowers, and of course investors are high on that list.

Also, CMHC will insure less mortgages. The new underwriting rules (on 2% higher than actual rates) will thus hit not just new buyers but also existing borrowers, all in the effort to create more "housing affordability".

Access to credit is being systemically withdrawn in Canada by our "middle class" pandering socialist government because 2 housing markets are out of control: Vancouver and GTA. It's the price you pay as ordinary Canadians for lack of tax enforcement, lack of proper real estate taxation vs excessive income taxes and excessive immigration. Related thoughts here on the BC governments decision to hike real estate taxes http://myreinspace.com/threads/thin...s-new-taxation-policies-on-real-estate.38373/
 

KeithnCalgary

Mortgage Associate & REIA
REIN Member
Joined
Mar 21, 2011
Messages
154
When you consider A lender rental interest rates are at or near 4% if you have to pay about 5% at B lender that is not bad. If you have no other lending options and don't want to sell what choice is there.

Sent from my SM-G935W8 using myREINspace mobile app
 

housingrental

0
Registered
Joined
Oct 10, 2007
Messages
4,733
I like this post Thomas.
To add to your second last sentence inappropriate zoning, parking, height, set back, requirements, and permit delays are also factors.

Lenders can get higher rates if they auto-renew unreviewed. Some lenders go that route. Others just wish to weed out more risky borrowers, and of course investors are high on that list.

Also, CMHC will insure less mortgages. The new underwriting rules (on 2% higher than actual rates) will thus hit not just new buyers but also existing borrowers, all in the effort to create more "housing affordability".

Access to credit is being systemically withdrawn in Canada by our "middle class" pandering socialist government because 2 housing markets are out of control: Vancouver and GTA. It's the price you pay as ordinary Canadians for lack of tax enforcement, lack of proper real estate taxation vs excessive income taxes and excessive immigration. Related thoughts here on the BC governments decision to hike real estate taxes http://myreinspace.com/threads/thin...s-new-taxation-policies-on-real-estate.38373/
 
Top Bottom