Need Rental Income to Qualify for a Mortgage – Options Exist

by admin on May 14, 2010

Bad credit mortgages can workThe author is a BC mortgage broker with extensive experience with bad credit mortgage loans.

People buy houses to live in and others as vehicles for speculation. Another group buys the house to live and carves off the space to rent. The rental income can provide a cushion or a way to pay down the mortgage faster.

On April the 19th CMHC changed the rules governing rental income and suites. CMHC now requires that rental suites be legal and they will only include 50% of the rental income. The 30% reduction in the rental income can be a make or break for home buyer who needs a the rental income to qualify.

Vancouver mortgage rates are on the up swing. The potential increase in mortgage payments will make it more difficult for people to manage their mortgages from purchase and refinance perspectives.

There are still lenders and mortgage insurance companies that will extend rental income to 80%. In the provinces of Ontario and BC, some lenders and mortgage insurance companies will allow up to 80% of the rental income. Some lenders and mortgage insurance companies will also allow for the income from illegal suites to be counted.

There is hope for the home buyer. They will need to be savvy and tight with a dollar but the purchase of a home is still the best way for most Canadians to ensure financial independence.

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