Sunday, July 13, 2008

CMHC mortgages -Important changes announced

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.


Highlights:


  • 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.


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Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,


Mark



A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


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