What to Know About Mortgages and Lending

Although mortgage rates have been decreasing, the underwriting guidelines that allow people to be approved have been getting more and more restrictive. The currently idea behind this is that what we are currently seeing in the Vancouver market, and other real estate markets across Canada, is increasingly exhibiting bubble-like traits. This has gone far enough to permit one of the major banks to call for government intervention.

You may be thinking, “Just because some of the larger cities are experiencing a bubble, why should that affect me buying elsewhere in the country?”

The answer here is that although the market you’re looking into may not be directly affected by the scenarios being faced by some larger cities like Vancouver and Toronto, the mortgage underwriting guidelines are generally created to be used universally across the country, so what affects one market can affect them all.

So what does this mean for someone looking to buy a vacation home in Whistler?

Basically, if you are applying for lending as long as you have good credit and have a sizeable down payment, you should be fine. What the underwriters are looking for is a good debt / asset ratio, and making sure that someone who Is applying for a second mortgage or new mortgage for a vacation home isn’t getting in over their head.