Hey Everyone,
Just wanted to pass along some information about the new mortgage rules that are being implemented on March 18 of this year. Thank you to Adam Gauer (one of the fabulous mortage brokers that I deal with) for sending me this information. Be sure to give me a call if you have any questions and to review how this may affect or not affect you. 604-910-LACE (5223) http://www.homeswithlacey.com/
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On January 17, 2011, Minister of Finance, Jim Flaherty, announced prudent adjustments to the rules for government-backed insured mortgages to support the long-term stability of Canada’s housing market and support hard-working Canadian families saving through home ownership.
“Canada’s well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped to protect us from the worst of the recent global recession,” said Minister Flaherty. “The prudent measures announced today build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future.”
The new measures:
• Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
• Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the re-packaging of consumer debt into mortgages guaranteed by taxpayers.
• Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.
The Canadian government’s ongoing monitoring and sound underlying supervisory regime, along with the traditionally cautious approach taken by Canadian financial institutions to mortgage lending, have allowed Canada to maintain strong and secure housing and mortgage markets.
The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011.
Be sure to give me a call should you have any questions!
Lacey
604-910-LACE (5223)
http://www.homeswithlacey.com/ (Source: JAC News)
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