IMPORTANT - New Mortgage Rules - How Does This Affect You?
Yesterday the federal government announced new mortgage rules to take effect July 9th. The changes include:
1. Reducing the maximum amortization period to 25 years from 30 years
2. Reducing the maximum amount of equity homeowners can take out of their homes when refinancing to 80% from the current 85%
3. Limiting the availability of government-backed mortgages to homes with a purchase price of less than $1 million
4. Fixing the maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%
The 1st and 4th change will have a fairly large impact on our purchasing market. Keep in mind that these changes are only for those needing high ratio mortgages, with less than 20% down payment. Purchasers with less than 20% down will find…