Hello, Everyone. This is a Update Email from Chad Dreyer. If you need A Mortgage Chad is happy to help to you.
Well it looks like CMHC has seen a dramatic decrease in file submission after their rule changes last year and effective immediately returned to their old underwriting policy’s regarding GDS/TDS & beacon scorers.
This is great news for your clients looking for insured mortgages as we are seeing a drop in beacon score from 680 to 600 and GDS/TSD returning to 39/44.
Please see the official press release below and let me how if you have any questions.
Effective July 5, 2021, we are returning to our pre-July 2020 underwriting practices for homeowner mortgage loan insurance, specifically:
CMHC will consider a Gross Debt Service (GDS) ratio up to 39% and Total Debt Service (TDS) ratio up to 44% for borrowers who have a strong history of managing their payment obligations.
At least one borrower (or guarantor) must have a credit score that is greater than or equal to 600 at the time of the request for insurance.
As always, CMHC will consider the overall strength of the mortgage loan insurance application, including alternative methods of establishing creditworthiness for borrowers without a credit history.
While we are making these changes, we continue to apply rigorous underwriting principles to the business we do to ensure potential homebuyers can meet their financial obligations.
Have a great afternoon.