CHANGES TO QUALIFYING FOR A MORTGAGE. 3 NEW RULES TO KEEP CANADA SAFE.
Just a reminder that the changes that Jim Flaherty, our federal Minister of Finance, announced to the Canadian Mortgage and Housing Corporation (CMHC) back on January 17th are coming into affect on March 18th. These changes have been designed to slow the rate at which Canadians are borrowing and to further stabilize the Canadian housing market. As long as your mortgage application has been submitted by the 18th you will still qualify under the old rules. Keep in mind that a mortgage application is good for 120 days (on average) so if you are potentially looking for a mortgage in the next couple of months you might consider submitting the application now.
It does take 1-2 days for an application to go through so I would suggest that you speak with your mortgage professional by March 16th at the latest.
How Might These Changes Affect You?
If you are a homeowner who might be contemplating refinancing for major renovations and your home has a high-ratio mortgage, the rules have changed in regards to what percentage of your home’s value may be used for refinancing purposes. The refinance loan-to-value percentage used to be 90% and on March 18th it goes down to 85%.
The maximum allowable amortization rate for high-ratio mortgages is about to decrease from 35 years to 30 years on March 18th too.
If You Want To Read More About These Latest Changes Check Out This Great Blog Post:
If I can provide you with the name of a mortgage broker to give you a second opinion, I would be pleased to do that as well. There are some very good rates being offered for which you may qualify. We find that clients get the very best mortgage deals by shopping around.
Of course, one doesn’t have to refinance to live in that perfect house. Another option might be to call me to go shopping for your dream home – you know – the one that has already been renovated!