Please read below as these changes will impact the qualifications for house purchasers.
Please speak to your mortgage broker for futher information.
Finance Minister Jim Flaherty has just announced sweeping changes to Canada Mortgage and Housing Corporation (CMHC), Canada’s national housing agency. CMHC is Canada’s premier provider of mortgage loan insurance, mortgage-backed securities, housing policy and programs, and housing research. These changes will take affect as of July 9/2012.
The 3 major changes are as follows;
1) A reduction in MAX amortization for CMHC insured mortgages from 30 years back down to 25 years. This will result in Canadian home buyers paying less in mortgage interest payments over the course of paying off their home. The downfall is that fewer people will qualify for a mortgage as the payments will be higher, and more income will be required to qualify for a mortgage.
2) Homes priced over $1 million are no longer eligible for CMHC insurance.
3) MAX refinance has been reduced from 85% (Loan To Value) LTV to 80% LTV.