Take a few minutes to talk about the mortgage climate in Vancouver
More specifically I wanted to talk about two aspects that have changed recently in regards to higher value lending
Let’s get down to it. 1st thing that has changed is how banks are treating foreign buyers.
I recently sold a $3.5M home in West Vancouver where I experienced this first hand
In the past a lender would have approved a loan from any foreign purchaser with 50% equity on a purchase of this size with not a lot of scrutiny.
The bank would not have looked too closely at the buyer’s source of equity or future income to pay the mortgage
Today things have changed. Banks are really analysing where a buyer is earning his / her income. This sale was under a subject to financing contract for over 2 weeks and the purchaser had to go to two banks to finally get the the loan approval and remove this subject condition
2nd thing that has changed is how banks are treating buyers looking to buy a home over $1M.
It is becoming tougher every year to get these higher value loans.
Last year the bank changed the equity requirements for any purchase over $1M.
Today banks require 20% equity for any purchase over $1M requardless of whether the buyer could support the higher mortgage payment with less initial equity.
Is it good or bad that the banks are becoming more strict with respect to high value lending?
I think it is a good thing. By making it tougher to get a mortgage and really doing due diligence the banks are moving in the right direction.
Last thing we want in Canada is to have buyer’s defaulting on loans and another 2008 repeat.
If you want to learn more about Vancouver real estate or if you are interested in buying a home in Vancouver, please feel free to give me a call anytime at 604-808-9796.