Another change in the industry which is making it harder for people to qualify for a mortgage. TD Canada Trust was among the first to announce that they would be making changes to the way they qualify some for mortgages. More specifically it was decided they would use the full credit limit on a secured line of credit instead of the balance owing. So, if you have a secured line of credit with a limit of $100,000 and a balance $25,000, they would use a payment assuming a balance of $100,000.
This change will most certainly impact those looking to buy another house. Another potential impact would be when your mortgage is up for renewal you may not qualify to move your mortgage to another lender. Also, it may affect your ability to co-sign for a mortgage.
What can you do?
• Don’t apply for the biggest line of credit you can get
• Only apply for what you need
• Reduce your limit as the need decreases
• Contact a mortgage broker so we can discuss your needs and come up a plan to ensure you have as many options as possible.
My two cents
This new policy is in my opinion paving the way for what is coming next. I feel like it is only a matter of time before the policy makers are looking at unsecured debt the same way. Looking at your qualifying power based on how much available credit you have. You may in the future have to really pick and choose what cards you carry in your wallet and more importantly how many with what credit limits!
At the end of the day it is always best you speak to your Mortgage Broker about your options. I specialize in mortgages so therefore offer the best unbiased opinion about what is best for you.
I have a plan, contact me if you find yourself in this predicament. There are things we can look at.
Shawn Mooney | Bayfield Mortgage Professionals Ltd.
Broker of Record
Your Mortgage Broker for Life
Bus. # 403-945-8769 | Mobile # 403-828-1838
Email: mortgages@shawnmooney.com
Website: www.shawnmooney.com
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