A new year and some changes.
The first half of January 2011 saw a drop in new listings in the Toronto market. This could present a good selling opportunity. Call me for a market update in your area!
Also,the federal government has announced changes to mortgage financing rules for government-backed (insured) mortgages (less than 20 per cent down payment), which will affect maximum amortization periods, mortgage refinancing, and home equity lines of credit.
The changes announced by the federal government include:
- Maximum amortization period reduced to 30 years, from 35 years.
- Maximum amount Canadians can borrow in refinancing their mortgages lowered to 85 percent, from 90 percent, of the value of their homes.
- Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit. This change would apply to Home Equity Lines of Credit that do not amortize over time (i.e. borrowers are not required to make regular payments on the principal amount of the loan).
The changes to amortization periods and refinancing rules will come into force on March 18, 2011. The withdrawal of government insurance backing on home equity lines of credit will come into force on April 18, 2011. Exceptions would be allowed after the new measures come into force where they are needed to satisfy a binding purchase and sale, financing or refinancing agreement entered into before the corresponding coming into force dates.