There were 3 changes to mortgaging this spring that will effect your real estate mortgaging as well as some changes to your lines of credit. Below Lyle Somers, our in house Mortgage Broker with Assured Mortgage Services, has provided a brief outline of the basics of these changes.
"Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire. On a 200,000 mtge using a 5 yr fixed rate of 3.79, the pmt will go from 857.00 per mnth to 927.00. This change will go into effect on March 18 2011.
Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers. This change will go into effect on March 18 2011.
Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers. This change went into effect on April 18 2011." Assured Mortgage Services, Lyle Somers, Mortgage Broker