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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Al and Peggy Cunningham, Brokers
RE/MAX West Realty Inc., Brokerage
10473 Islington Ave., Kleinburg, ON L0J1C0