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21 Jun

Big News: Changes to Mortgage Rules

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Department of Finance has announced tightening on mortgage rules again. Below is a brief summary of the changes. We’ve seen this happen continuously over the past 4 years as the government tries to minimize overall household debt.
 

The following changes will be in effect July 9, 2012:

 Reducing the maximum amortizations to 25 yrs on high-ratio insured mortgages (those with less than 20% equity)

  1. Eliminating lending on high-ratio mortgages over $1 million
  2. Reducing the maximum amount for refinances to 80 % of the current market value. Currently that maximums is set at 85 %.
  3. Reducing the debt-service  ratio’s that borrowers can go up to for mortgage qualification.

 In summary; if you are looking to purchase a home and need a longer amortization to qualify for the amount you need, act now. 

 If you are looking to refinance your home to access the maximum amount of equity, act now.