Changes to mortgage rules for purchasers are changing as of April 19th!! In an effort to keep buyers from getting mortgages that may be unmanageable when the rates increase, as of April 19th there will be new restrictions for purchasers, specifically for those making purchases on investment properties that will not be owner occupied.
Here are the basics:
1)If you are a purchaser who is intending to live in the property you are buying, you will still be able to purchase the property for 5% down. But you will be required to qualify based on the 5 year fixed rate even if you take a lower rate and term when you close. (currently most financial institutions use the 3 year fixed rate to qualify you)
2) If you are refinancing your home (borrowing from the equity in your property to pay off debts or make improvements) the maximum lendable loan to value will be reduced from 95% to 90%.
3) If you are investing in real estate, specifically in a non-owner-occupied residential rental property, the downpayment required will no longer be 5%. You will be required to provide a minimum of 20% down on your new investment purchase.
You can find the full press release from the Department of Finance at http://www.fin.gc.ca/n10/data/1-=011_1-eng.asp
what do you think of these new changes? is it big brother going too far or a smart financial move for the security of our nation's economic stability?
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