18 Dec

Mortgage Stress Test – Not the Bad Guy


Posted by: Kevin Carlson

Ever since the federal government regulator, The Office of the Superintendent of Financial Institutions (or OSFI) brought in the Mortgage Stress Test, there has plenty of blame heaped upon it for slowing home sales and new home starts. Even though it has slightly reduced how much of a mortgage I can approve my clients for, the initial logic is sound. The stress test attempts to protect Canadians from taking on more mortgage debt than they will be able to afford when their mortgage renews down the road.

What it doesn’t do is curb additional debt and other financial factors after the mortgage starts. Many clients do not consider long term changes like, child care expenses, new vehicle loans, ongoing credit card and line of credit debt payments.

I work with many first and second time home buyers with wide ranging financial details. The stress test is a limiting factor, but in no way is it the largest culprit in preventing my clients from getting mortgage they are requesting. Credit cards, lines of credit and vehicle loans have a much larger impact on reducing the mortgage borrowing ability for most of my clients.

Here are some real-world numbers on 2 hypothetical first time home buyer scenarios that help to illustrate what consumer debts can have on a mortgage application.

1. Individual or couple – scenario 1
Buyer(s) with household gross income of $80,000.00 that have $17,000.00 as down payment.
There is a student loan with a payment of $200 per month and a vehicle loan of $300.00 biweekly.
This application would be approved for the purchase of a $250,000.00 detached home.
An additional monthly credit or loan payment of only $300.00 per month will prevent mortgage approval for this application.

2. Individual or couple – scenario 2
Buyer(s) with household gross income of $125,000.00 that have $33,000.00 as down payment.
There is a student loan with a payment of $200 per month and a vehicle loan of $300.00 biweekly.
This application would be approved for the purchase of a $500,000.00 detached home.
An additional monthly credit or loan payment of only $500.00 per month will prevent mortgage approval for this application.

Credit cards, lines of credit and vehicle loans are exceedingly easy to obtain but could stand in your way when you are looking to buy your first or next home. Please consider carefully before financing anything. If you are curious about what your debt numbers look like you can try using my Iphone or Android app to find out.

Click Here to Download the App

25 Oct

New Marijuana Rules – What Is A Grow Op?


Posted by: Kevin Carlson

There is quite a bit of information being passed around about growing marijuana in your home that could or will prevent the sale of your property down the road. (Please read the entire article)

CMHC is Canada’s federally owned mortgage insurer. As of October 25, 2018, their stance on homes that were former grow operations has not changed and reads as follows.

“At this time, CMHC is not making any changes to its mortgage loan insurance policies in relation to the impending legalization of cannabis. CMHC will continue to insure mortgage loans for homeowner residential properties (1-4 units) and multi-unit residential properties (5+ units) where cannabis was previously grown and/or will be legally grown. We will also monitor the impacts of the Cannabis Act on our mortgage loan insurance activities over the long term.
We will also be reminding Approved Lenders that, in cases where property damage has occurred, they are required to disclose this information to CMHC in making the request for mortgage loan insurance and confirm that remedial action has been taken to address any related property damage/alterations.”
Courtesy Beverly LePage, Client Relations – CMHC


HOWEVER, in my opinion as a mortgage broker, it is the damage to the home from a “typical illegal” grow op that is most important here. When one hears “grow op” you picture rooms full of plants with lights and irrigation lines with no care taken to prevent irreparable damage to the home.

Please consider the following scenarios.

Tomato Enthusiast #1
Tomato enthusiast #1 absolutely loves tomatoes. He/she finds them relaxing and even fun to share with friends. Tomato enthusiast #1 places dozens of tomato plants in every room of their home with full irrigation and grow lighting. Without proper ventilation this caused a drastic increase in humidity in the home. If that were to continue, a dangerous mold condition may develop, making the home uninhabitable. In this case the damage that Tomato enthusiast #1 caused may prevent a mortgage from being placed on the property by the lender and/or insurer.


Tomato Enthusiast #2
Tomato enthusiast #2 also loves his tomatoes but not quite as much as #1. He/she enjoys having a few slices on toast on a Friday evening as a weekly treat. Tomato enthusiast #2 places 4 tomato plants in front of the living room window and daily watered & talked to them pleasantly. Having 4 tomatoes plants in the home was not illegal before October 17th and probably never will be. With proper care the 4 tomato plants thrived and never caused any damage to the home. A few weeks down the road Tomato enthusiast #2 decided to sell the property. When their trusted realtor arrived to list the home there was no apparent damage caused by any plant or animal that resided there and it was immaculate. It is highly unlikely that the presence of 4 tomato plants would prevent approval by a mortgage lender or insurer.

31 Jan

2017 Mortgage Insurance Premium Increase


Posted by: Kevin Carlson

Well 2016 was action packed in the mortgage industry with changes to regulations

and it looks like 2017 holds a few surprises too.  For the third time in the past four years,

mortgage default insurance premiums are scheduled to increase as of March 17/17.


Just as a refresher; mortgage default insurance is sometimes referred to by

the general public as CMHC fees.  CMHC (Canada Mortgage & Housing Corp.) is just

one of the three insurers that provide default insurance in Canada.  This insurance

is required when a client obtains a mortgage for the purchase of a home with

less that 20% down payment.  It carries a onetime premium of a percentage

of the mortgage amount and is often added to the mortgage. 


This insurance protects the mortgage lender from losses in the event that

the home owner defaults (stops making payments) on their mortgage to

the point of eventual foreclosure.


The other two default insurers are Genworth Canada and Canada Guaranty. 

Genworth has announced their premiums will also increase to match CMHC on March 17th

Canada Guaranty has not sent out a press release yet, however it’s inevitable that they will follow suit.


So how much more will it cost the average buyer? 

I have ran the following numbers that will give you an idea of what the typical

first time home buyer might be faced with.


Purchase price: $300,000.00

5% down payment: $15,000.00

Mortgage insurance premium today of 3.60% of the mortgage amount: $10,260.00

Monthly mortgage payment now: $1,365.68


Mortgage insurance premium after Mar. 17/17 of 4.00% of the mortgage amount: $11,400.00

Monthly mortgage payment after Mar. 17/17: $1,370.96


Difference in premium: $1,140.00

Difference in monthly payment: $5.28


In order to avoid paying the increased premium, your “live” mortgage application must be

submitted prior to the March 17th deadline.  Then the funding of the mortgage can still take place

after the deadline at the lower premium.  It is unclear yet how much longer after but I would

expect at least 120 days.  Pre-approval applications do not qualify as “live” so an offer to purchase

for the home to be mortgaged must accompany the application.


20 Sep

OSFI Proposed Changes – 2016


Posted by: Kevin Carlson

Some of you may have heard that there are some changes coming in the mortgage industry that could end up costing you more.  I just wanted to give you all a very brief overview of the changes that are coming, however the costs associated with this are still relatively unclear.

The Canadian government regulates banks, credit unions, trust companies, etc. through the Office of the Superintendent of Financial Institutions or OSFI.  The best description of what they do is within their mandate noted on their website…

“OSFI acts to protect the rights and interests of depositors, policyholders, financial institution creditors and pension plan beneficiaries while having due regard for the need to allow financial institutions to compete effectively and take reasonable risks.”

Click here to read their complete mandate.

This basically boils down to protecting Canadians from a similar mortgage crisis that the US experienced starting in 2007.  No small task as what happened then had ripple effects globally for years.

Among its many rules and policies, OSFI has what is called a Capital Adequacy Requirement (CAR) guideline that dictates the ratio of a bank’s capital to its risk.  In simple terms it is similar to what a water reservoir is to a city.  A federally regulated guideline to make sure that there is a healthy reserve on hand in case of a drought or in this case financial loses.  Under the proposed new guidelines this amount is not expected to increase by very much.  However what is new is the “countercyclical buffer” policy.  This allows OSFI to continually monitor the markets and have the banks put aside more capital if the markets start to become abnormally volatile.  To extend the metaphor, start rationing water well ahead of when the reservoir starts to run dry.

These changes were introduced as a proposal and open to public consultation until October 18, 2016.  That being said however, these changes are to come into effect on November 1, 2016 for the big banks.  I will let you decide what “open to public consultation” means with these dates already set in stone.

The money to set aside certainly will not be coming from bank profits, but it still remains to be seen how much this will really cost Canadians in the long run.  It will be difficult for the average consumer to see these costs as they will disappear into slightly higher borrowing costs and less return on your investment dollar.  Even so, I am sure that it will be a small price to pay to ensure our national financial well being.

This is a very basic outline but if you are interested in learning more, please let me know and I will send you links to many good industry articles that go into this in more depth.

20 Apr

Quick Mortgage Pre-Approvals


Posted by: Kevin Carlson

I am sure that most of you have seen advertisements saying…


KYC is a common acronym in the financial world and it means Know Your Client. 

After over a decade as a mortgage broker I can tell you that it takes longer than 10 minutes

to pre-approve a client for their mortgage.  In fact, it often takes more than 10 minutes to go

over mortgage basics for a first time home buyer who needs my help to understand the process.

Speak to any realtor and they will tell you the disappointment that a client goes through

when a mortgage pre-approval fails to move to actual approval for the home they

worked so hard to find.  Quick pre-approvals lead to missing key pieces of the

mortgage application that may become a barrier once the mortgage approval is requested.

Here are some of the things that can come up in a mortgage application that can be missed.

Down Payment

The source of down payment funds is highly regulated to prevent money laundering. 

If you have had all the down payment funds in your bank/investment account for at

least 3 months, then that is usually just fine.  Statements for those previous 3 months

are requested and submitted to the lender for review.  Any deposits to your account

over those 3 months that are not payroll related is questioned.  Some issues that I

have seen cause problems are:

  • ·         Funds recently transferred from the US
  • ·         Funds transferred from a line of credit
  • ·         Cash deposits
  • ·         Funds given from a non-family member


If you are a full time permanent employee who is salaried, using this income is easy.

Part time, temporary or full time with no guaranteed hours is where income qualification

can prevent a mortgage from being approved.  If you have been with the same employer

for at least 3 years then we can use an average of your income over the last 2 or 3. 

This is often what is done for those who are self employed and we use the personal

taxable income shown on line 150 of the notices of assessments.  There are still

“stated income” programs out there to help those who show very little income

after their accountant has worked their magic.

Credit Reports

It is my standard practice to access credit reports for every client at the beginning

of the pre-approval process.  This is a crucial time to address any problems or issues

that may be on a credit report.  Some examples of potential credit report problems are:

  • ·         Old paid out loans showing a balance still owing
  • ·         Collections from any creditor
  • ·         Habitual late payments
  • ·         Credit cards over their limit
  • ·         Previous bankruptcy or foreclosure

I just want to close this newsletter off with a note about mortgage promotions put out by

some of the retail banks.  Promotions like “Employee Pricing”, “1.99% Mortgages”,

“Switch Your Mortgage And Get $500” are often not as good a deal as they appear. 

Please check with me before applying for one of these promotional mortgages. 

If I cannot prove to you that I can obtain a better rate and/or terms for you,

then the promotional mortgage will be the way to go.

10 Mar

CIBC 1.99% teaser mortgage rate


Posted by: Kevin Carlson

I saw an ad on my Facebook newsfeed about one of Canada’s retail banks offering a 1.99% mortgage rate. Sounds great, right? Well, let’s read the fine print, check the math and find out.

You get 1.99%… for the first 9 months only. Then it gets boosted up to 2.83% for the next 39 months for a total of 4 years.

Today I have a 4 year fixed rate of 2.59% for the entire 4 years.

Based on a mortgage of $300,000.00 here is the interest costs for each over the 4 year term…

Teaser 1.99% / 2.83% = $29,945.45

Broker discount 2.59% = $28,447.56

Savings = $1,497.89

If it sounds too good to be true folks….

9 Mar

Rent to own – Renter Beware!


Posted by: Kevin Carlson

Buying a house with “rent to own” contract can be a good way to live in the home you are saving down payment for. However, what if the owner of the home defaults on their mortgage and ends up in foreclosure? You could lose the down payment you built up and have to move when the bank sells the property. Renter beware!

18 Jan

Minimum down payment over $500k


Posted by: Kevin Carlson

Good day all;


I am sure most of you had heard about the change to the minimum down payment requirement

for the purchase of homes over $500,000.00 announced on December 11th

Just to clarify; this increase to 10% down is only on the purchase amount over $500,000.00.


For example:

Purchase price of $600,000.00

Minimum down payment required of 5% on the first $500,000.00 = $25,000.00

Minimum down payment required of 10% on the remaining $100,000.00 = $10,000.00

Total minimum down payment required = $35,000.00


This new rule comes into effect on any mortgage applications submitted after Feb. 15/16. 

Mortgage applications submitted prior to this date will be subject to the old rules of a

flat 5% down payment provided that the mortgage funds before July 1/16.


I am happy to report that in spite of oil prices and slowing economy, I have not been

working with an increased number of clients in financial trouble.  Even though

residential construction in Regina has slowed, commercial projects like the stadium

and the new International Trade Centre at the exhibition grounds move forward with

high demand for labour. 


However, much like a leaky dam, the time to address financial trouble is before

the dam bursts.   If you or someone you know is facing income interruption and

subsequent credit issues, please get in touch with me right away.  Mortgage options

for those with good credit are greatly varied.  Once a few months of missed credit

payments go by, the mortgage financing options get fewer and what is left is higher

interest rates and less access to home equity to help bridge the gap in hard times.


Last year, DLC – Bittner Mortgages held a referral contest where each client and the

person who referred them to us received one entry each into a draw for a travel voucher. 

We had a terrific response to this promotion and I would like to again thank all those

who referred others to me for their next mortgage.  In December we drew the name

of the happy winner of the travel voucher who is one of our valued mortgage clients in Estevan. 

We were so happy with the response that we are working on a similar promotion

for 2016 right now, so keep those referrals coming in.


“Warm” regards,


17 Jun

Your credit report & auto dealership financing


Posted by: Kevin Carlson

Hello All;

Most everyone needs a car loan at some point.  I wanted to pass along some information on car loans and the credit checks or hits that take place in the process of a car loan.

 A credit check is required anytime someone is applying for any sort of financing such as mortgages, loans and credit cards.  There are also many other corporate entities that will get a look at your credit report that most people are not aware of.  Cell phone providers, rental property managers, collection agencies and even some health clubs often use credit checks.

Anytime your credit is checked there is always a little bit of a dip in your credit score.  This is temporary and your score will rebound within a few weeks.  The decrease in score is an anti-fraud measure built into both credit reporting agencies, Equifax and Trans Union.  This prevents someone from financing many high ticket items like vehicles over a day or two with the intent of never paying and selling them for cash.

 I find that most vehicle loans these days are done through dealerships.  This can be good because interest rates can be lower than going to your own bank.  However there is one big difference that everyone should be aware of.  Just one application for vehicle financing at a dealership could generate anywhere from 2 to 6 or even 8 hits to your credit report over a few days.  This most often happens with clients that have less than optimal credit history.  Multiple credit hits such as this will make it take much longer for your credit score to rebound.  Repeated activity like this over a few years will eventually illustrate a credit report of a client that the banks label as a “credit seeker”.  Banks and mortgage lenders see credit seekers as a risk and are often declined for mortgages.

My advice is that you only apply for vehicle financing once you have chosen the vehicle you are going to buy.  Applying for financing at just 2 dealerships can turn into over a dozen hits on your credit report very quickly.

17 Apr

DLC – Bittner Mortgages Referral Promotion


Posted by: Kevin Carlson

DLC – Bittner Mortgages Referral Promotion



For each closed mortgage, the individual providing the referral and the individual being referred will both receive one entry into the draw

Contest begins February 15, 2015 and ends November 30, 2015

Winner will receive a $4000 (CAD) travel voucher to be used towards destination of choice

Travel voucher must be used for travel between December 15, 2015 and December 30, 2016



The Dominion Lending Centres – Bittner Mortgages’ Referral Promotion is open to individual legal residents of Canada who have reached the age of majority within the province or territory in which they reside at the time of entry.

No person who is employed by Dominion Lending Centres or its affiliate companies, and no family member of such employee shall be entitled to enter the contest.  Employees of financial institutions that hold a partnership with Dominion Lending Centres are excluded as well. 



Upon closing your mortgage transaction with a broker from DLC – Bittner Mortgages, you and the individual who referred you will automatically be entered in the draw


Prize Draw

Winner will be determined randomly via an online generator

The winner will be notified by email and/or phone within 7 days of the closing date. If the winner cannot be contacted or do not claim the prize within 14 days of notification, we reserve the right to withdraw the prize from the winner and pick a replacement winner. The winner will receive a voucher from TravelOnly and will book all travel directly through Holly Elias.


Conditions of Entry

By participating in this contest, contestants agree that they will comply with the official rules and the decisions of DLC – Bittner Mortgages; and they will release DLC – Bittner Mortgages from all liability for any injuries, losses or damages of any kind resulting from their participation or the acceptance, possession or use of the prize.


Use of Contestant Information

By entering the contest, contestants consent to the use of their names, photo, city of residence, and prize details in all forms of media for promotional purposes.



This promotion is in no way sponsored, endorsed or administered by, or associated with Facebook. By entering this contest you are releasing Facebook of any liability in relation to this contest.