With the most recent mortgage rule changes coming into effect during July, there remains to be seen how all the provincially regulated credit unions will adjust to the new world of lower risk mortgage financing prescribed by the federal government.
First of all, credit unions are very well established and financially prudent lending organizations, so I don’t see any type of land rush so to speak to gain market share from banks and trust companies that fall under federal banking regulations.
But in certain situations and for certain borrowers with strong profiles, credit unions may be able to provide what the banks cannot.
For instance, banks are going to be providing HELOC’s or home equity lines of credit at a maximum of 65% loan to value down from 80%. While some credit unions will adjust to stay right in step with the main line lenders, there are still those that are offering HELOC’s from 65% to 80% loan to value.
Once again, not everyone may be able to qualify for this and its unclear if the opportunity to secure a higher HELOC through a credit union will continue, but for now it certainly can be an option for some that may gain credit unions some business and borrowers a higher borrowing amount at preferred rates.
The same may also be true for self employed individuals in terms of the manner in which they need to be able to support their earnings, and for still others that are looking to secure a variable rate or a term rate less than 5 years who have to use the 5 year fixed rate to qualify where some credit unions are still using the three year rate.
There is also a strong possibility that credit unions will soon be allowed to operate outside of their current provincial boundaries which could provide program offerings to you in the future that are not currently provided by credit unions in your area, assuming you even have regional or local credit union services available to you.
In the near term, as mortgage holders scramble a bit to get their home financing to fit into the newly minted mortgage regs, there is no doubt going to be more individuals checking out what their local credit union has to offer.
And in cases where strong borrowers are caught by mortgage rules that are inflexible, there may be some very strong options here to consider.
If you’re looking for a bank alternative for a specific financing requirement, I suggest that you give me a call and we’ll go through your situation together and discuss all the relevant options that may be available to you.
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel