Deadline March 18, 2011
A quick news recap for you – you may have seen my video blogs going in depth on each of the items which were affected by the previous weeks New Mortgage Rules announcement. For those of you who aren’t sure what those mortgage rules are, or where to find the information from the Finance Minister or CMHC, I’ll recap it all here. Details in the report indicate the changes are as follows:
· Maximum amortization periods will be reduced to 30 years from 35 years on new government-backed insured mortgages.
· The maximum amount Canadians can borrow to refinance their mortgages will be lowered to 85 per cent from the current 90 per cent.
· The government will withdraw its insurance backing on lines of credit secured on homes, such as home equity lines of credit. (Not in force until April 18th, 2011)
Overall this is not bad compared to what has been speculated. The one will have the greatest effect is the lower maximum amortization period as it reduces borrowing power by the purchaser.
What Should You Do?
For everyone considering to purchase a property or to refinance your current mortgage, we strongly recommend you speak with your mortgage coordinator as soon as possible to see how the changes will affect you. The best scenario is if you can complete your purchase or mortgage transaction before the deadline of March 18th 2011 when the new rules come into effect. Please check out my video blogs on each of the changes where I’ll go into detail on how it might affect you and where are the pros and cons of each mortgage change. If you need clarification feel free to contact me.
And here is the link to find the official press release: