MORTGAGE INDUSTRY NEWS
February 2010
The Bank of Canada has announced more changes to mortgage programs in an attempt to prevent home buyers/owners from from accumulating too much debt. The changes will become effective April 19th, 2010. They are:
1. All mortgages will be qualified at the 5 year fixed mortgage rate, including variable rate mortgages.
2. Home owners will only be able to refinance their mortgages to a maximum of 90%, down from 95% of the value of their home.
3. Investment properties will also be affected with larger down payment requirements. We require further clarification on this as it is unclear who and what types of properties this will affect.
April 2009
Self Employed/Alt-A insured mortgages: Recently, Genworth Canada has made changes to their self-employed insured programs. These programs affect those people who are 100% commissioned or incorporated. They have also reduced their allowances for debt service ratios. They have reverted back to the 32%/40% ratios of income to debt. Even though these are meant to only affect high ratio mortgages, many of our lenders insure conventional deals behind the scenes, therefore, these new rules may also affect conventional deals. They are really tightening their belts. We expect to see similar changes with CMHC and AIG. Please stay tuned for further information or contact us to see how this may affect you.
October 1, 2008
Effective, October 15th, 2008 the Government of Canada is implementing some drastic changes to the mortgage programs that are currently available.
The new maximum amortization period will be reduced from 40 years to 35 years. Purchasers will be required to have 5% as a minimum down payment, 100% financing through traditional lending sources will no longer be available. Read more here.
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