Mad Mike
Well-known member
No, banks are taking a more holistic view of the debtor, not just the equity in one asset.
Lenders realize the default rates are low for people with equity, decent credit and moderate TDS ratios.
COVID and the housing market
- Thread starter mimico_polak
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Lenders realize the default rates are low for people with equity, decent credit and moderate TDS ratios.
All banks seem to be doing things a bit differently . I read the article in the Globe of several customers being de-banked by Royal , no large debts , just no considered a suitable customer . Newly widowed friend with a million dollar house , some investment and no debt had her line of credit cut by two thirds when it was announced at the bank she was now on her own. Banks seem to be a little less cavalier with customers.
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Probably minimal income so it couldn't support the loan if she maxed it.
I have a re-advanceable mortgage. Mortgage plus HELOC adds to a specific number. As mortgage gets paid, room on HELOC goes up. The max of the combined value is less than 40% of the value of the house. Earlier this year, they reduced the max by about 1%. Didn't matter to me as I'm not pegging HELOC but it seemed strange. They had zero risk in either situation.
Identical experience and situation for me. "Sorry for your loss, please use your LOC for any unfortunate expenses incurred, oh and we're cutting your LOC in half"
Lol this was the cloverdale project?
I lived at Westmall/Bloor for decades.
That gas station was removed in prep for this build what, almost 10 years ago now it seems like?
TD? I wish we had that type of mortgage / HELOC as it seems to be a great option.
We have a standard HELOC, but will consider going with the 'MCAP Fusion Mortgage' when the time comes to renew (2027).
This one is scotia but lots of companies offer them. FWIW, HELOC increasing isn't automatic. Technically there are three buckets (mortgage, HELOC and additional credit available). You have to call them (and IIRC sign something) to push additional credit available into HELOC room. I normally do that at renewal as I'm already having to deal with them. It's just a stupid game to peg credit score. That way when I do borrow to invest I can stay below 30% utilization.
Conceptually, I like Manulife One where your working capital saves you some interest but their rates are higher than they should be imo.
Mad Mike
Well-known member
Getting demarketed requires some serious bad behaviour. Abusing or threateninga banker is the easiest, multiple fraud findings, dealing business thru personal accounts or anything that involves financial crimes will get you debarked. Especially at risk are those connected to terrorist financing, tax fraud and money laundering.
banks work on numbers - it’s not personal when they alter limits. When they reduce the limit on a heloc, it’s most likely due to local valuation changes.
In the outer reaches of the GTA, home values ram up faster and higher as demand was fuelled by speculation. As speculators retreat, oversupply drives value down fast and harder.
Valuation definitely dropped from the peak. On the other hand, the sell it in five minutes price is still almost 50% higher than when they initiated the product in the first place so their risk has decreased substantially.
Mad Mike
Well-known member
Still a numbers game. Banks each have their own “risk appetite”, which boils down to their exposure on loans. Outlying areas are always riskier due to higher default rates and larger swings in value when facing uncertainty or economic headwinds.
I got caught in the downturn in the early 90s - I had great income but too much leverage, I had to shore up equity to renew mortgages on a few properties, I couldn’t come up with the required topics so I had to sell everything.
Had the banks let me slide, I’d have recovered a in about 4 years. Instead I had to liquidate - nearly wiped me out.
These days they would have let me slide.
Yeah, Cloverdale Mall. The beer store is closed and that road blocked off. The mall is half dead and I don't know if they will try a resurrection.
Once Target left...that mall was dead...when The Bay left (or was it Zellers)...that was basically the second to last nail in the coffin.
Target came in, didn't live up to the hype, and disappeared.
That mall has always sucked. I'm shocked it's been around so long, and am more shocked they didn't build 5 towers on that plaza yet.
TBH shopping in the area sucks in general. Sherway is Yorkville West and everything else is like dumpster diving.
