• A young woman we’ll call Donna just separated from her husband. Here she was now single, with four kids, two part-time jobs and with a mortgage. Due to her credit score (550) we managed to help her keep her home and put her in a program to lift her credit, albeit in a B mortgage. It’s now three years later. Donna has paid her mortgage perfectly. She has a better job and credit score is now 605. We would think she is ready for the big leagues and a prime A mortgage. Not so fast!

    With the new mortgage stress test, banks are not only rejecting good clients who cannot afford a mortgage, they are rejecting good clients like Donna who now have worked hard to get their scores over 600. The credit scale has now risen. It is stated that there are 20% more bank rejections. Now former A mortgages are going to B. The secondary market loves this. The secondary market loves it since they are getting their best applications in years.

    We are working hard to put Donna into a great mortgage, but the effects of the new mortgage rules are in play. Believe it, they are having an effect on the market and in the fabric of the borrowing community. This higher scale of credit in bank acceptance should be interesting to watch.

    Robert can be contacted at 905-574-9200 Ext. 215 OR by email at mortgages@robertfloris.com. You can fill out an application online at https://application.malink.ca:8112/App/MARC/FLORISR/en-ca/1896 with absolutely no pressure and no obligation.

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