The Employment Climate Has Evolved. What Does That Mean For Your Mortgage Needs?
With the more recent changes in the mortgage world concerning rates and qualification guidelines, many hopeful first time home buyers and existing home owners have noticed that obtaining financing is not as simple as things are perceived. With many clients now obtaining mortgage solutions that are more costly than previous years, many are navigating their way through new application expectations, and pose valid concerns, in spite of still qualifying. These concerns are valid and matter. The Government of Canada took what appears to be drastic measures intended to protect the Canadian Housing Market. As Mortgage Professionals continue to work within the new qualification expectations, there is one particular area that requires more attention than the government has provided: Mortgage Professionals are provided the opportunity to observe employment trends of the Canadians that they interact with. I have personally noticed important factors that require the attention of both the Canadian Government as well as Canadian Banks and Alternative Lenders. The majority of my clientele comprises of individuals who are self employed or host a few strong part time positions. Many hold post secondary education and enjoy their work lifestyle. Most of our parents were conditioned to and perceived success as landing a permanent position that one holds until retirement. This is no longer a realistic expectation for Canadians. Many companies provide employment opportunities that are contract positions or short lived. Although the way many Canadians are generating an income has drastically changed, many factors remain the same, like feeding your family or student loan repayment. Many clients are earning income through methods like social media, blogging, network marketing and other concepts that in no way resemble traditional employment in any fashion. The concern for many is that their sources of income do not fit within the current lending guidelines, or forces them into higher interest mortgages due to the guidelines and laws lack of attention to their income reality. The government has paid focus upon ensuring that Canadians can continue to afford their home purchases over the courses of their loans. Even more so that interest rates have risen, but there is no where close to enough attention to how we as mortgage professionals can provide products that service Canadians who are hard working, have managed to save a down payment of sorts, and have strong credit, and are gainfully employed. Even if that means four solid part time jobs. As time progresses, the way in which we generate income will continue to evolve. If the Canadian government does not allow citizens to purchase properties because they do not fit within lending guidelines designed to consider alternative, legal approaches to income generation, they may stand a chance of losing citizens to other countries that are forward thinking in their lending approaches and employment expectations. This is solely my perspective. I do not foresee home ownership becoming less important to Canadians, so neglecting that which is important to Canadians who are currently in their working years will be a poor choice by the Canadian government. In my next post, I will outline how Canadians who are having concerns with obtaining mortgages due to 'unique' employment situations can obtain mortgages. Although the process may not be easy, it is always best to determine a course of action for one's self.