Mortgage rules will be changing again effective July 9, 2012. Have you been considering a refinance? If so you will want to do it immediately so that you can take advantage of the full 85% loan to value financing before it is reduced!
Other changes include amortization periods but the minimum down payment has NOT changed! This is good news!
The changes are as follows:
1.Maximum amortization for CMHC insured mortgages from 30 years to 25 years.
2.Refinances for CMHC insured mortgages up to a maximum of 80% instead of the current 85% Loan to Value. This does not include purchases. Purchasing a house with 5% down, and in some cases, no down payment has not changed at this point.
3.The maximum GDS of 39% for CMHC Insured mortgages. Previously, the maximum GDS was 35% with a credit scores less than 680, and 44% with a credit score greater than 680.
4.Maximum TDS of 44% for CMHC Insured mortgages. Previously the maximum TDS was 42% with a credit score less than 680 and 44% with a credit score greater than 680.
5.Maximum purchase price on CMHC insured mortgages of $1 million.
CHANGES ARE TO TAKE AFFECT AS OF JULY 9TH 2012. Anyone wishing to refinance their mortgage to 85% Loan to Value, should do so ASAP as banks and lenders may adopt this change immediately instead of waiting until July 9th 2012.
As for purchases, keep in mind that CMHC does not do pre approvals. Therefore, for clients that have been pre approved through a bank with less than 20% down, the amount that they may have been pre approved for could change if they do not get an accepted purchase agreement in order to get a final mortgage approval by July 9th.
If you have any questions about your own mortgage, how this will affect you, or for further clarification please contact me today and I will be happy to help!