Back to subprime lenders. Last week I did a brief blog on them. I have since read a media report that says that US subprime mortgage lenders are/are planning to pour into
Canada
as the next untapped market….it notes that these lenders are fine in a rising market because the property price increase buffers the payments. Defaults occur in a falling market where payments are too high based on a new lower value home (ie. The person paid more and borrowed more than the property is currently worth). Apparently with the falling market in the US, it is anticipated that one in five of the subprime mortgages written in the past 2 years will end in default…..scary but at this point not a real concern in Canada-so far not only is our economy stronger, but with the help of a good mortgage broker, most people aren’t going to find themselves in this kind of situation even if they do use a subprime lender. If you need some advice on finding a good, ethical mortgage broker, please let us know!
