Tag Archive for: CMHC

Rules, Rules, Rules

Here is the information regarding the new mortgage rules that will come into effect on April 19th of this year. The changes are not as bad as some were predicting. This is the summary, and the text is below.
Starting April 19th
1. Borrowers need to qualify using the 5 year fixed rate
2. Refinances maxed out at 90% LTV
3. 20% downpayment for mortgages tied to non-owner occupied properties bought for speculation.
Canada will bring in new mortgage rules to cool the country’s red-hot housing sector, but does not think the market has entered into bubble territory, Finance Minister Jim Flaherty said on Tuesday.Concerned that new homebuyers may overextend themselves, the government said it is implementing three changes to mortgage rules that will help prevent the problems seen in other countries that helped trigger the global financial crisis.

“Today’s … Read more

Setting the record straight!

This post is in response to an article in the business section of today’s Chronicle Herald newspaper. While I admire and respect the broker quoted in the story, I believe that some of the message can easily be taken out of context and I just want to set the record straight. 

I have been a mortgage broker for just over 6 years now. During this time a lot has happened and a lot has changed in the Canadian mortgage market. Canada started off with only one true sub prime mortgage lender, several had entered the market and now we are back to only one again. With the advent of rampant sub prime lending here in Canada; we were introduced to 100% financing, stated income products, interest only mortgages and products for clients with less than perfect credit. While 95% … Read more

A zero-down mortgage by any other name?

LORI MCLEOD

Globe and Mail Update

July 31, 2008 at 7:49 AM EDT

As the financial industry sits down with Ottawa this week to assess tighter mortgage rules, another lending product could find its way into the spotlight – cash-back mortgages.

Keen to avoid a U.S.-style housing bubble, the federal government recently cracked down on lenders and insurers through a series of reforms. Major changes already announced include a planned withdrawal of government guarantees for mortgage loans where the down payment is less than 5 per cent of the home’s value, and for those with amortizations of more than 35 years.

Yet while lenders are phasing out so-called zero-down mortgages, many are still offering buyers a similar option through the use of cash-back incentives in lieu of a down payment. This practice will be up for discussion this week, said

… Read more

Death of 40-year mortgage!

I could not have said it better my self so here is the article in it’s entirety.

Cheers,

Pat

 

Entrepreneurs’ flexible finance scheme quashed

Tony Wanless, Financial Post Published: Monday, July 21, 2008

For sale signs lined up along the street on Country Village Landing N.E. for condos in this Calgary, Alta. neighbourhood.Dean Bicknell/Canwest News ServiceFor sale signs lined up along the street on Country Village Landing N.E. for condos in this Calgary, Alta. neighbourhood.

When Canada Mortgage and Housing Corp. (CMHC) recently announced it was no longer backing 40-year amortization mortgages, it presumably was attempting to put some order into the teetering housing and mortgage markets. In the process it quashed the hopes and dreams of thousands of Canadian entrepreneurs who had rallied to the new mortgage as a flexible method of financing small businesses.

The 40-year mortgage was initiated by lenders last year as home prices climbed to levels that put monthly payments out of reach

… Read more

Mortgage insurers push to keep zero-down loans!

Garry Marr, Financial Post Published: Tuesday, July 15, 2008

Private mortgage insurers are pushing for ways to keep no-money-down mortgages alive and are set to meet with Department of Finance officials in the next two weeks to discuss possible options, sources indicate.

The move comes after Ottawa cracked down on mortgage practices that allowed consumers to enter the housing market with no money down and amortize their loans over 40 years. New rules that come into effect on Oct. 15 would demand a 5% repayment and shorten the length of amortization from 40 years to 35 years.

Sources indicate the country’s major private insurers, which control about 30% of the market, have told mortgage brokers they are working on a solution which would keep the zero-down option alive and even the 40-year amortization.

One insurer, PMI Canada, which has been

… Read more