The New Credit Market
In this new credit market created by the fallout of the subprime mortgage fiasco in the United States, consumers are running into some very different parameters when looking to borrow mortgage funds right now.
Not so long ago, back in the good old days about a month ago, lenders were falling over themselves trying to get you to borrow from them. In the past couple of weeks things have tightened up considerably and many major players in the mortgage lending market have closed up shop due to the difficulty in obtaining mortgage funds to lend out and the high cost of doing so. Putting aside the obvious difficulty for marginal borrowers, even borrowers with good credit qualifications are feeling the pinch in terms of the rates they are now being asked to pay to cover off these increased costs to lenders. Not so long ago (a few weeks past) you could have obtained a variable rate mortgage at Prime less .75% but you are now looking at Prime rate with no discount or, in the case of a Line of Credit product, rates have moved from Prime rate up to as much as Prime + 1.5%.
Borrowers have also had products taken away from their prior suite of available offerings and can no longer obtain 100% financing or stretch their amortization out to 40 years. The maximums are now 95% loan to value and a 35 year amortization, except under special circumstances. The effects are also being felt for consumers looking to finance rental properties, vacation homes, obtain bridge financing or in some cases even just obtaining a rate hold on a mortgage pre-approval can be difficult due to the rapidly changing economic conditions.
The phrase, ‘this too shall pass' comes to mind and things should eventually normalize again but in the meantime we could be in for a bit of a roller coaster ride.
Even though things sound very gloomy out there in the press right now there are still plenty of lenders who are ‘open for business' and as a long time mortgage specialist, I am still able to obtain highly favourable terms for any credit situation you may require.
As always if I can provide clarification on anything mortgage or credit related, please feel free to email or give me a call.
Jerry Sims is a mortgage broker with Ambro & Associates Mortgage Consultants Ltd. with over 20 years of lending, banking and financial planning experience. A highly satisfied and loyal client base can attest to Jerry's knowledgeable, creative and caring service that rises above and beyond expectations. Jerry has worked at several financial institutions in the capacity of loans officer, branch manager and credit manager.
Please feel free to ask John for an endorsement if you would like to know more about my services.