Burlington,Oakville Listings - View Virtual Tours, Click On Picture!
September 7th, 2010 
Neighborhood Office 3185 Walkers Line
905-332-2207

Re/Max Escarpment Realty Inc.
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CHANGES TO MORTGAGE QUALIFICATIONS
Wednesday, 24 February 2010, 09:51:06 AM
Effective April 2010 changes to mortgage qualifications for insured mortgages come into effect! The key issues in this change are:

1. ) Any non-owner occupied properties will now require 20% down;
2. ) All borrowers must meet same standard for five year fixed rate even if they choose a mortgage with a lower interest rate and shorter term;
3.) The maximum amount you can withdraw for refinancing will be 90% of value compared to 95%.

All of the above changes are for the government backed mortgages such as Canada Mortgage and Housing Corp. insurance on high ratio mortgages. Some of these changes are to discourage speculation because of the low interest rate.

Right now, borrowers may purchase a residential property with a 5% down payment. The change will require a 20% down payment for small non-owner occupied residental rental properties. Borrowers purchasing owner occupied residential properties which also include some rental units, like a duplex, will still be able to access government backed mortgage insurance with a 5% down payment.

Other changes in the qualifications is based on qualifying for a five year term instead of a three year term based on your gross debt service and total debt service ratios and is intended to protect you with additional flexability should the interest rates rise.

Right now homeowners can refinance their home and increase the borrowed amount up to 95% value of their property. The new change will lower the maximum refinancing of a government backed high ratio mortgage loan to 90% of the value of the property.



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