Quote:
Originally Posted by V
Am I going to need CMHC next fall if I have 20% equity in my house with respect to the purchase price from last fall, but house prices drop 10% at the time I'm renewing?
ie: Bought a house last year for $470k, have to renew my mortgage next year for $375k. Will the bank need an appraisal?
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I don't think so. Usually banks just renew without any further appraisals as long as you have not missed any payments. I've never had to do anything other than choose a term and sign. You would have to get an appraisal if you switch lenders though and that would likely require cmhc insurance.
You likely paid some of the principal down in the last year so that helps. As well, appraisers are usually slow to adjust down. You may think your property is worth 20% less, and in reality it might be a tough sell for you even at that price. But appraisers have to look at recent sales and sometimes in a down market people are not selling so the recent sales might not be as bad as you think.