Changes to the Mortgage Market as of March 18, 2011
- · The maximum amortization period – 30 years
- · The maximum amount that can be borrowed when refinancing a mortgage - 85% the value of the home
Q: How will this affect my renewal, or if I want to port to another lender?
A: It should not affect the renewal as the lender will typically offer you a renewal even if the remaining amortization is longer than 30yrs. Port to another lender, will now be more difficult to do as it would be at the discretion of the new lender.
Q: What if I want to add to my current mortgage balance, will the new rules apply to my new mortgage?
A: The new mortgage is just that “a new mortgage” and the lender and default insurance company must follow the new rules.
Q: What if I have an approval and my funding date is after the March 18, 2011 deadline?
A: The lender and the default insurance company should honour the approval as long as the purchase contract is firm and the buyer is committed to the purchase before the March 18, 2011 --- CAUTION: This is only a guess and I will need to confirm this on a case by case basis---
Q: What if I have a pre-approval with a 35yr amortization and I have not entered into a firm contract to buy a home by March 18, 2011?
A: The lenders cannot hold the terms of a pre-approval; therefore, the rate and terms are subject to change unless the pre-approval is converted into an approval with an accepted offer to purchase.