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)
- Eliminating lending on high-ratio mortgages over $1 million
- Reducing the maximum amount for refinances to 80 % of the current market value. Currently that maximums is set at 85 %.
- 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.