The Federal Government announced changes today on government backed mortgages - these changes will directly impact buyers who require 100% financing and the extended 40 year amortization.
- 40 year amortizations will no longer be allowed (for CMHC insured mortgages);
- Minimum 5% down payment will be required....(CMHC will no longer be able to insure 100% financing);
- Stricter documentation requirements:
- Higher minimum credit bureau score;
- New changes effective October 15, 2008.
This announcement was made today - so there will likely be more updates and clarifications made in the near future - I'll keep you posted.
Also, these changes are related to government backed mortgages (insured through CMHC). Two other mortgage insurers currently offer 100% financing and 40 year amortizations. At this time, they have not communicated any policy changes.
See the following link for the complete announcement: http://www.fin.gc.ca/news08/08-051e.html.
Also, word on the street....The Bank of Canada is considering a prime rate increase - and no doubt the banks would follow suit...if you need preapproval - this is a good time to secure a rate hold.
Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate
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