We have options to help you buy a new home:

Given the continued government manipulation and changes in the Canadian mortgage market, the above issue is becoming a common one when clients want to buy a new home.  The reason that the bank is telling you that you have to sell your current home to buy a new home has to do with the rental offset and calculation that the banks use. The good news is that we have couple of remaining lenders in Canada that use a much more favorable calculation for you.

Here is an example to illustrate your qualifying:

Assuming an income of $60 000, and your current home payments of $1200 with rental income of $1500. – Based upon these rough numbers, to a common sense person your rental property covers its expenses and should not count against you……………..unfortunately no one chose to inform the banks and CMHC about common sense

The bank qualification method based upon their rental add back will qualify you for a mortgage of about $200 000

Based upon using a net rents calculation that takes into effect a much more realistic look at your true property costs and revenue we are able to approve you for a mortgage of around $300 000.  This is a staggering difference of a 50% increase in mortgage approval amount and could make the difference between buying your new home and not.

CMHC allows both methods to be used by lenders and it is up to the lender’s internal policies as to the method they choose.  However, the unfortunate reality is that almost all Canadian banks and half of the trust companies use the calculation that hurts your opportunity to buy a new home.

Please feel free to contact me so we can work together to create solutions for you to buy a new home – Rylan