“Your clients are tied up in what the bank can give [them],” says Winnipeg-based real estate agent Brad Gross. “They have to save or get a family member to help them out.”
Since the sea-change in mortgage rules ushered in by the federal government in 2012, real estate agents have generally insisted on prequalifying clients for the home they seek. It’s all about ensuring they pass qualifying standards tied to income and debt ratios.
Upping down payment amounts is one way of getting over that hurdle, say mortgage brokers, themselves advocating parental help for young buyers unwilling to wait.
But, Gross says first-time buyers often overlook the helping hand that family members can provide or the fact the CMHC recognizes gift money as an acceptable mechanism for qualifying.
There is, of course, the option of lowering the bar on the type of home clients are searching for but that kind of restraint in hot markets such as Vancouver and Toronto won’t necessarily pay off unless prices dip.
“That’s not something we forecast,” Ted Tsiakopoulos, regional economist with CMHC, told an audience of brokers Tuesday. “There’s still some room for growth here.”
That’s part of the reason for the proactive approach of agents such as Gross, now willing to have those tricky conversations with clients sooner rather than later.
Many agents are now proactively suggesting gen-Y clients ask family for help with a down payment in anticipation of the growing struggle they’ll face to qualify under tighter lending rules.