Mortgage Industry Changes in 2017-2018:

Some of the biggest changes in the mortgage industry have happened in recent years. The new stress test was the biggest rule change in the mortgage industry. This was also shocked by a huge increase in the interest rate.

Expectations for 2019:

This year is also expected to stress the mortgage industry. Here are some of the things we are expecting:

Variable Rates to Fixed Rates:

Many indicators are showing a weakening Canadian economy. Right now, there is a significant difference between the fixed and variable mortgage rates. These 2 points are making variable rates popular. Later in the year, this difference is expected to decrease. At that point, the fixed rates may become more enticing in the mortgage industry.

Rules Becoming Less Strict

From a political standpoint, borrowers are finding it more and more difficult to qualify and this is making the politicians a little unpopular to say the least. In 2019, we are expecting a little more leniency to be reintroduced when qualifying in the mortgage industry such as a cap on the so-called stress test rate, increasing the amortization from 25 years to qualify, and the ability to avoid the stress test completely when switching lenders.

Moving Away From Branches

The cost of keeping in house mortgage specialists in the branches is passed on to the borrower. We are expecting lenders to move towards call centres, websites and video to stay competitive in the mortgage industry. This will mean less trips to the bank.

Unused Credit

Some banks count your home equity line of credit limit (not balance) as debt when trying to qualify for another mortgage. Even though you may not have used any of the credit sitting in your line of credit, banks will likely start to “hold it against you” when qualifying.

Artificial Intelligence

Artificial intelligence! As with everything else, the mortgage industry is expected to become more and more automated over time. This means that likely potential borrowers will start by speaking with an automated bot to filter out the preliminary questions, though the humans will still have the option to speak with other humans if they insist!

2019 should be an interesting year in the mortgage industry!

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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