July 9 is the deadline for all lenders to submit their mortgage applications under the old rules. After that, any mortgage submitted will be subject to the new rules made to mortgages in Ottawa. However, some lenders are ignoring that deadline and implementing the new rules early.
First National, which is the country’s biggest lender that’s not a bank, and Radius Financial are the first two institutions to say that they’d be implementing the new rules early. They’ll be implementing the rules on July 3. ICICI is also jumping in early, implementing the new rules one day earlier on July 6. And as lenders prepare for the newest changes, we can probably expect more lenders to make the same kind of move in the next week or so.
So why the early implementation dates?
It’s because mortgage insurers aren’t allowing any exceptions to the new rule, and they’re definitely not extending the dates on any mortgage applications. If an application is submitted a day or two before the deadline, it may not be enough time. It often takes time for an underwriter to review a mortgage application and then send it on to the insurer – who may have questions of their own that they need cleared up. Getting mortgages in early ensures that all questions can be asked and everything can be fully reviewed, all while keeping it within the deadline date.
One lender that’s implementing the new rules early say that it’s all of these things combined with the fact that June is already the busiest time of month for mortgages and second mortgage closings; and this is only going to put a flood of new buyers on the market and those who need to get their papers in order before July 7. Implementing the rules early just means that it gives the banks more time during their busiest month; and it could also tamp down the amount of people standing in their lines – something that will also help during their busiest month.
Because of this, anyone who wants to obtain a mortgage under the old rules should applly no later than July 3; although most lenders and insurers will be open tomorrow, June 30, before the Canada Day holiday. Lenders and insurers will also be working on July 7; but for many, by then it will be too late.
