New Mortgage Rules for July 9th, 2012
By now, almost everyone has heard about the fact that the Canadian Government has introduced new mortgage rules. But a few misconceptions are still out there. Recently a friend told me :”No more 5%-down mortgage”. Actually thats not true… here are the main points in the recent mortgage rule announcement.
1) If you need CMHC insurance, you won’t get a 30-yr mortgage
This means, that if you have 20% (or more) as a down payment, you may still get a 30 yr mortgage, but anyone with less than 20% down, and needing CMHC mortgage insurance, will only be able to get a 25-yr amortization. Unfortunately this WILL affect many first-time buyers, and it is exactly these first time buyers who have been driving Winnipeg’s real estate market.
2) Borrowing against your home reduced from 85% down to 80%
This means that if you want to pull out some equity and use it for that new boat, or build a cottage, etc… you will now only be able to borrow a total of 80% of the value of your current home
3) Million-dollar plus homes will not qualify for CMHC insurance.
Meaning that if you are buying a home in Vancouver, 2 BR and 1 Bath may have to suffice……. just kidding, but any homes worth a million or more will now need to be purchased with at least 20% down under the new mortgage rules.
feedproxy.google.comAugust 3, 2012 7:49:39 AM CDT
Winnipeg Real Estate Market update August 2012 . For August 2012, I take a closer look at the sales and listings in Winnipeg. I segregate the housing market along 3 different price ranges, from ‘entry level’ homes (between $50,000 and $199,999), to ‘mid-range homes’ (between $200,000 and $399,999) and finally Winnipeg real estate luxury homes (above $400,000). This monthly [...]
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www.canadianrealestatemagazine.caAugust 2, 2012 9:34:01 AM CDT
Finance Minister Jim Flaherty announced Wednesday that there will be no more tightening of mortgage rules, following a series of revisions beginning in January.
Speaking from the heart of California’s Silicon Valley, Flaherty said he was happy with the results of recent changes such as lowering the cap on amortization terms.
“There has been some softening in the past month or so,” he said. “So right now there is no intention to intervene again.”
Canada’s over-heating housing market has long been a concern for Ottawa, with home prices hitting a record high for the third straight month in June.
The condo market has been a particular source of contention, with many developers and economists worrying about the sustainability of growing markets in major cities.
“We always monitor the housing market,” said Flaherty. “There has been concern, particularly with the condo market in Toronto and Vancouver. We have taken steps, including recently in June, another step to tighten the market for residential mortgages.”
Since the changes to insured mortgage rules took effect last month, the finance minister has expressed confidence in the pace of change, but only hinted at their effectiveness. Wednesday’s comments mark a change.
Still, conditions for lenders and borrowers remain tighter, which could spell good news for landlords with existing properties.
Confident that the real estate market will continue to cool, Flaherty aims to shift his focus to economic stimulus in a bid to balance Canada’s budgets for the long term.
“We are seeing modest growth, not as much as Americans and Canadians would like it to be, but it is growth. And that’s better than many Western countries.”
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