Recent Important Changes to Mortgage Rules that come into effect April 12, 2010
Recently, Federal Finance Minister Jim Flaherty announced prudent changes to mortgage insurance rules intended to come into force on April 19, 2010. The changes are as follows:
1.) All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;
2.) The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home;
3.) Non-owner occupied properties will require a minimum down payment of 20%.
"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," Minister Flaherty said in a press release.
There were no changes to down payment requirements or length of amortizations for owner-occupied residences.
These changes will further establish a solid lending foundation to the Canadian Mortgage Industry. It will require buyers to further confirm their financial capability to purchase an investment property, reduce the ability for speculative buying and reduce any of the risks that have lead to America’s Housing bubble from occurring in Canada.-RightPricedRealty.com
Click here (http://www.fin.gc.ca/n10/10-011-eng.asp to read the government’s announcement.
No comments:
Post a Comment