Personal Finance

"pre-approved" for CIBC LOC but they did a hard hit anyways?

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  • May 9th, 2013 3:46 pm
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Nov 25, 2011
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I think one hard hit might knock 14 points of your score - or at least it did for me. In about 1 month you'll have some of these back and 2-3 months down the line you'll probably have all the points back. I wouldn't worry about it in the slightest.
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Nov 30, 2009
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In some way, would Mark77 not be correct in saying your mortgage rate may depend on downpayment? While it may not be an absolute guarantee, I think you would be in a better situation to negotiate, non? Of course you overall credit score/moreso history matters too, as it determines how timely you pay your bills.
[QUOTE]I wish there was a way to know you're in the good old days before you've actually left them.[/QUOTE] ~Andy Bernard, The Office (U.S.)
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Psygineer wrote: I'm not going to take sides here, but let's try to keep it civil and factual.
Mark77 has done this at several finance threads recently, anything related to mortgage or credit. He posts something very erroneous to push a personal agenda (he pushes that CMHC is subprime, and that interest rates are based on downpayment), then leaves never to return in the thread, despite several people correcting him and him never backing up his statement. Note he won't post in this thread again (as has been the case in several of his run bys of late). He has a history of doing this.

The issue is not the misinformation, it's the fact that people are asking for honest advice and he's deliberately misinforming them. Laptop-tech is an actual mortgage broker and practices the rules on a daily basis.
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Jul 16, 2003
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LostInTruth wrote: In some way, would Mark77 not be correct in saying your mortgage rate may depend on downpayment? While it may not be an absolute guarantee, I think you would be in a better situation to negotiate, non? Of course you overall credit score/moreso history matters too, as it determines how timely you pay your bills.
Nope. For a mortgage, you either qualify based on criteria that fundamentally starts with credit worthiness or you dont qualify. Occasionally there are situations or specific lenders that that will be more focused on equity than credit, but this would be the absolute exception, rather than the "general" rule.
Pitz has no qualification or understanding whatsoever regarding qualifying rules, or mortgage underwriting policies. There are several brokers/agents/bankers in this forum who constantly see his absurd posts about people "easily qualifying for mortgages 7X their incomes", or "Your 'credit' for a mortgage depends mostly on how much downpayment you bring to the table. Not on the credit 'score'." and when they correct him on the spot, he cannot provide any evidence to support his claims.

A mortgage is approved taking in consideration several factors, and without credit your application is not even taken seriously, no matter how much down payment you can bring to the table. Same with income. You must be able to service the debt load, and lenders (A, B, C types of lenders) MUST be convinced that you can service those debts. Over the past 1-2 years we have seen several changes to the industry, and for the most part is is more and more difficult now to get an approval the moment you exceed GDS/TDS limits. Equity deals that in the past were a way out of tight situations, are almost non existent now.
Banks/lenders these days want to see a minimum beacon score of 650, and will entertain a beacon 620... but the rate is the same either way. A beacon score of 680 or higher enables you to elevate those GDS/TDS ratios a bit, yet the rates are still the same.

There is a similar problem regarding the rule of CMHC in the mortgage world. While the planet believes that CMHC has nothing to do with subprime, one 1 person on Earth believes CMHC is related to subprime : Pitz and Mark77.
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LostInTruth wrote: In some way, would Mark77 not be correct in saying your mortgage rate may depend on downpayment? While it may not be an absolute guarantee, I think you would be in a better situation to negotiate, non? Of course you overall credit score/moreso history matters too, as it determines how timely you pay your bills.
Your mortgage interest rate does not depend on your downpayment though (which is why his info is erroneous). A large downpayment eliminates CMHC if the downpayment is 20%+, and a larger downpayment means you may be approved for a mortgage with slightly lower credit rating (lower downpayment means higher minimum credit rating needed to be approved). The interest rate however is based off of credit rating and your ability to pay. I've got a 2.89% 5 year fixed interest rate with a 'subprime' CMHC insured downpayment of only 10% (locked in 120 days before closing). The mortgage agent I delt with even stated that a downpayment increase has no impact at all on the interest rate offered (which is true), and having CMHC has no impact at all on the rate I received. Whether you put 5%, 10%, 20% or even 50%, the rate offered at the time was 2.89%. I have impeccable credit and a good salary, which got me the rate. I can always get an even sligthly better rate within 30 days of closing, again with only 10% downpayment. To Mark77, he would actually claim that my 2.89% rate is subprime.

If you have solid credit, your downpayment itself as long as it's 5% or more will have no impact in your approval or interest rate. Mark77 claims the opposite, that a downpayment will impact interest rates. He even made this post in another mortgage thread.
Mark77 wrote: That's not true. The amount of equity brought to a deal is a huge factor in determining the credit-worthiness of the loan. Credit scores are only looked at when a loan does not qualify solely on equity.

A $20k downpayment pretty much ensures that a substantially higher interest rate will be applicable. Either explicit, or implied. As the credit quality of the loan is not very high.

Less than 20% equity automatically means that a loan is classified as 'subprime', and higher rates and/or mortgage insurance will be charged.

When making the buying versus rent decision, it is important to gather accurate information including an evaluation of the various alternatives out there.
This information that downpayment has no impact on rates has been confirmed by many sources, including several of the mortgage brokers that post on this forum.
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Nov 30, 2009
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^^ Thanks for clarifying, I honestly do not know much about it, but I just thought I'd throw a noob question out there lol
[QUOTE]I wish there was a way to know you're in the good old days before you've actually left them.[/QUOTE] ~Andy Bernard, The Office (U.S.)
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LostInTruth wrote: ^^ Thanks for clarifying, I honestly do not know much about it, but I just thought I'd throw a noob question out there lol
All questions are good. This is why it's so important that they be answered correctly, and why Mark77's answers are so dangerous as they are deliberate fabrications and may mislead people into a wrong financial decision if not corrected.

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