Tuesday, February 23, 2010

New Mortgage Rules in Canada

In light of the recent announcement concerning Canada bringing in new mortgage rules, we thought we would highlight some of the changes.

The rule changes, which come into force on 19 April, will require borrowers have the resources to qualify for a five-year fixed-rate mortgage even if they decide on a lower-cost variable mortgage. With interest rates near an all time low, this pro-active measure is designed to prevent the kind of problems that caused the US housing market to collapse.

The government will also lower max. amounts that can be withdrawn when the borrowers re-finance mortgages, ensuring that equity is kept in the home. The max. will now be 90 per cent of the value of the home, down from 95 percent.

The third rule change was that there will also be a requirement for a min. down payment of 20per cent for insured mortgages tied to properties purchased as speculative housing investment and not occupied by the home buyer.

If your contemplating purchasing a home on Gabriola, you may want to speak to your bank or mortgage broker, to see how these changes may affect you!

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