The tightening of lending guidelines poses a major issue for homebuyers – who may have been pre-approved in a far less strict environment a few years ago – as they work to get their finances in order to officially move in upon completion of the project.
“In my marketplace, we are surrounded by so many condos, and a lot of our clients trying to purchase with bad credit are having a tough time,” says Phil Edwards, a Toronto-based broker with MorCan Direct.
“They put their deposit down four or five years ago, and then they’re ready to register the unit and get a mortgage and they’re walking into tough times because over those four or five years something may have happened with their credit and they can’t now get approved for a CMHC-insured mortgage.”
Edwards believes prospective buyers can avoid this problem if they approach a broker early in the buying process, as opposed to simply getting a pre-approval from the lender’s bank affiliate.
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