This month I finished up my mortgage re-licensing education through the Mortgage Brokers Institute of British Columbia (MBIBC) and renewed my sub-broker mortgage license at the Financial Institutions Commission of British Columbia (FICOM).
What’s involved in re-licensing?
Re-licensing as a sub-mortgage broker in BC involves completing two online training modules. I chose to complete the ones on appraisals which I found very interesting and another on Form 9’s Investor/Lender Information Statements. I choose this one because my business has been taking a shift to alternate financing with many of the mortgage rule changes and I want to make sure I’m on top of everything. Once you finish the two online modules the only things left to do are a regulatory update webinar with the MBIBC, a criminal record check with the RCMP, complete the re-licensing application and pay the required fee to FICOM. My sub-broker license is now valid for another two years.
Mortgage Rule Changes
What really got me thinking this time I was renewing my license was the number of changes that have happened to the mortgage rules in Canada. When you see them all in one place it becomes quite apparent how much this business has changed since I first became licensed. That’s what I like about this business, it’s constantly evolving and changing and I’m still learning new things every day.
2012 Mortgage Rule Changes
HELOC (Homeowners Line of Credit) is reduced to a maximum of 65% LTV (Loan to Value)
Stated income Business for Self programs require 35% down payment or are subject to mortgage loan insurance
Cash-back programs are no longer accepted as down payments
Qualifying rates on conventional mortgages now use the 5 year benchmark rate for terms of less than 5 years and variable rate mortgages
Maximum amortization for insured mortgages is now 25 years
Mortgage insurance is no longer available for properties with a purchase price over $1 Million. Properties with a purchase price over $1 million require a minimum of 20% down payment
LTV (Loan to Value) for refinances reduced to 80%. Previously the maximum was 85%
GDS (Gross Debt Servicing) for qualified applicants is reduced from 44% to 39%
2011 Mortgage Rule Changes
35 year amortizations eliminated on insured mortgages the maximum is now 30 years
LTV (Loan to Value) for refinances reduced to 85%. Previously the maximum was 90%
Mortgage insurance on HELOC’s eliminated
2010 Mortgage Rule Changes
Benchmark qualifying rate is now used on high ratio mortgages for terms of less than 5 years and VRM’s (Variable Rate Mortgages)
LTV (Loan to Value) for refinances reduced to 90%. Previously the maximum was 95%
Rental properties no longer qualify for high ratio mortgages, down payment required is now 20% from 5%
Confused about the changes?
That’s what I’m here for! Feel free to contact me anytime to discuss how the mortgage changes could impact you and go over all your options.