Changes Are Coming Into Effect for Canadian Mortgage Insurance Approvals effective April 19, 2010
Changes Are Coming Into Effect for Canadian Mortgage Insurance Rules effective April 19, 2010
Our Canadian Federal Finance Minister Jim Flaherty made an announcement this week advising of prudent changes to mortgage insurance rules intended to come into effect April 19, 2010. Canadian Association of Accredited Mortgage Professions, CAAMP, were actively involved in the discussions of these changes as well.
The Federal Finance Minister said "the government is taking proactive, prudent and cautious steps to prevent a housing bubble."
These pro active steps will be as follows:
1. All borrowers must meet the standards for a 5 year fixed rate mortgage regardless if they choose a mortgage with a lower interest rate and shorter term
2. The maximum withdrawal amount in the refinancing of a mortgage will be reduced to 90% from the current 95% of the value of the property.
3. Non-Owner occupied properties will require a minimum down payment of 20%.
Further to these changes by the Federal Finance Minister, Canada Mortgage Housing Corporation, CMHC, is expected to change the TDS (total debt service ratio) formula on rental properties whether Owner occupied or not allowing 50% of the gross rental income to be included in the borrowers gross annual income.
These changes will come into effect April 19, 2010
For further information please click here.
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905-450-5500
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Your mortgage standards look much more favorable than America's and Canada may have higher success rates by going every 5 years. Thanks for the information Al & Peggy!
Al and Peggy some of these changes are similar to some of the Conventional (Fannie Mae & Freddie Mac) changes that we have been seeing here in the States.
We are not sure if this is going to cut a few Buyers out of the market, but are sure in general it is a more stable idea Wanda
Hey George, are they similiar? Maybe they got the idea from Fannie & Freddie...really though a few banks had already been qualifying buyers at a more realistic rate anyway, now it is just becoming law.
Al and Peggy - We are waiting for the regulations to come out that provide more details on the announcement as clarifications are still needed.
BTW, you need to change the link to mortgagebrokernews.CA from COM.
Hi Marc, the mortgage brokers in town are issuing all sorts of announcements, advising everyone of the April 19th changes.
We actually changed the entire link now over to Jim Flaherty's press release.
Check out what the Globe and Mail had to say http://www.theglobeandmail.com/globe-investor/personal-finance/why-jim-flahertys-mortgage-rules-wont-hurt-homebuyers/article1469927/