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Flex Mortgage

Flexible mortgages help debt problems

Britons are feeling particularly positive about flexible mortgages at present, as they see them as a good way to ward off debt problems. This is ...

Focus on Affordable Housing

Now, more than ever, Canada needs affordable housing. In the interview ahead, Daniel Bragagnolo, First National’s Director of Commercial Financing, discusses the financing complexities of affordable housing and the advantages of CMHC’s new Flex Program.

What is the definition of affordable housing?

It’s an umbrella term that keeps expanding and really describes a whole continuum of housing. It can refer to social housing, including rent-geared-to-income units, assisted-living accommodations, and housing for the middle class that offers just below market rents.

What makes lending on affordable housing different than, say, lending on a regular apartment building?

The underwriting isn’t as simple as a typical apartment building where market conditions dictate the revenue and all rent comes from the tenants. In affordable housing, that’s not the case. There are many different funding or subsidy pools that affordable housing providers can access. Many times, these funding sources can have various restrictions, so it’s important as a lender to understand each one.

Home owners with mortgages face first interest rate rise for a decade

The interest rate in the UK has been increased for the first time in a decade meaning that home owners with mortgages on lenders’ standard variable rates are likely to find their monthly bill going up from December.

The Bank of England’s Monetary Policy Committee announced a 0.25% rise, taking the rate to 0.5%, and while it will affect SVR mortgage rates, home owners on fixed rate mortgages will not pay more until their deal comes to an end.

It is likely to be the first of a number of rises over the next five years with forecasts indicating it could reach 2.25% by 2022. JLL predicts that there will be steady, small rises up to 2.25% in its new property market forecast report.

In its latest housing market forecast Savills also predicts that the Bank of England base rate will reach 2.5% over the period and average mortgage rates reach 4% over the next five years.

Ian Kernohan, economist at Royal London Asset Management, believes that further hikes will depend on Brexit. ‘As long as interest rates rise very gradually from here, then with around 60% of mortgages on fixed rate deals, the impact on household finances shouldn’t be too severe, and will be offset by any future fall in inflation,’ he said.

Who should get a flex pay mortgage loan?

So my husband and I have found a home that we really love but its out of our price range at the current moment. I have a job in September on hold when I graduate from college and we will be able to afford the house then, but it will probably be gone.

Those loans are generally gone. They are certainly gone if you also don't have a down payment.

The reason they are gone is that they were too high risk for the average person to correctly handle.