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Kristi Hyson · 06-21-2012, 08:53 PM

This morning, the Federal Finance Minister announced further changes to Canada's mortgage insurance rules. Four measures were announced, effective July 9, 2012

1. Amortizations reduced to 25 years
2. Refinancing limited to 80%
3. Properties purchased at over $1 million no longer eligible for mortgage insurance
4. GDS and TDS set at 39% and 44%

What do all of these changes mean in the grand scheme of things? It can mean many different things to many different people. If you are looking to buy a home it may mean the difference between qualifying for a lower mortgage amount based on a 25 year amortization instead of a higher amount a 30 year amortization.

Some items to consider prior to the effective date:

· A pre-approval will not hold the amortization period, only the interest rate. A firm purchase agreement will be required to obtain a mortgage insurer approval. Closing can be in the future past July 9th, however no changes to the mortgage in terms of increase can occur past July 9th if a 30 year amortization is required.
· If you are building a new home with a completion mortgage and to qualify you require a 30 year amortization, a final purchase price will need to be completed with the builder and submitted to the lender for approval prior to July 9th to maintain a 30 year amortization.
· If you were considering on refinancing your home and required the funds from your home up to 85% loan to value and 30 year amortization an approval will be required prior to July 9th when the maximum equity take out changes to 80% and the amortization is reduced to 25 years.

Below are excellent links to view the articles surrounding the new regulations and the link to contact Minister Flaherty and your local MP.

To review this morning's Globe and Mail article

http://www.theglobeandmail.com/report-on-business/economy/housing/ottawa-tightening-mortgage-rules-no-more-30-year-amortizations/article4358876/

To review the government press release and backgrounders

http://www.fin.gc.ca/n12/12-070-eng.asp

To contact Minister Flaherty or your local MP

http://www.parl.gc.ca/Parlinfo/Compilations/HouseOfCommons/MemberByPostalCode.aspx?Menu=HOC

06-21-2012, 08:53 PM	#68
Kristi Hyson Draft Pick Join Date: Oct 2011 Location: Calgary	This morning, the Federal Finance Minister announced further changes to Canada's mortgage insurance rules. Four measures were announced, effective July 9, 2012 1. Amortizations reduced to 25 years 2. Refinancing limited to 80% 3. Properties purchased at over $1 million no longer eligible for mortgage insurance 4. GDS and TDS set at 39% and 44% What do all of these changes mean in the grand scheme of things? It can mean many different things to many different people. If you are looking to buy a home it may mean the difference between qualifying for a lower mortgage amount based on a 25 year amortization instead of a higher amount a 30 year amortization. Some items to consider prior to the effective date: · A pre-approval will not hold the amortization period, only the interest rate. A firm purchase agreement will be required to obtain a mortgage insurer approval. Closing can be in the future past July 9th, however no changes to the mortgage in terms of increase can occur past July 9th if a 30 year amortization is required. · If you are building a new home with a completion mortgage and to qualify you require a 30 year amortization, a final purchase price will need to be completed with the builder and submitted to the lender for approval prior to July 9th to maintain a 30 year amortization. · If you were considering on refinancing your home and required the funds from your home up to 85% loan to value and 30 year amortization an approval will be required prior to July 9th when the maximum equity take out changes to 80% and the amortization is reduced to 25 years. Below are excellent links to view the articles surrounding the new regulations and the link to contact Minister Flaherty and your local MP. To review this morning's Globe and Mail article http://www.theglobeandmail.com/report-on-business/economy/housing/ottawa-tightening-mortgage-rules-no-more-30-year-amortizations/article4358876/ To review the government press release and backgrounders http://www.fin.gc.ca/n12/12-070-eng.asp To contact Minister Flaherty or your local MP http://www.parl.gc.ca/Parlinfo/Compilations/HouseOfCommons/MemberByPostalCode.aspx?Menu=HOC __________________