The Federal Government announced this morning four new clampdowns on insured mortgages that will quickly come into effect on Monday, July 9th, 2012.
Here are the changes announced:
- Reducing the maximum amortization period to 25 years from 30 years
- Reducing the maximum amount of equity homeowners can take out of their homes when refinancing to 80% from the current 85%
- Limiting the availability of insured mortgages to homes with a purchase price of more than $1 million
- Fixing the maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%
The first two will effect the majority of people. Lower amortizations will mean higher payments and a greater amount of income needed to qualify for a mortgage. The second will limit the amount you can refinance your home for. These restrictions will be placed on those with less than a 20% equity in their home or less than 20% down on a purchase. If you have been thinking about refinancing or your mortgage is coming up for renewal please contact me so we can go through your options and how this deadline could effect you.
If you have any other questions about the changes or how it could or will effect you please get a hold of me.
I have also included an answer sheet from the Federal Government explaining the changes in much greater detail if you are interested – http://www.fin.gc.ca/n12/data/12-070_2-eng.asp
Mark Delleman — (604) 889-0050 — firstname.lastname@example.org