NEWSLETTER
July
10, 2008
The
Department of Finance yesterday announced that it would change
some of the rules for high-ratio mortgages, and that “these
requirements will apply to all government-backed mortgage
insurance policies (whether issued by CMHC or private insurers)
for high-ratio mortgages on residential properties with up
to four units.”
Here
are some highlights of the changes:
1. Maximum amortization reduced to 35 years
for new government-backed mortgages.
2. Minimum 5% down payment for new government-backed
mortgages. Borrowers may borrow their 5% down payment, but
it will not be insured under the new guarantee framework.
3. New credit score floor of 620 for new
government-backed mortgages. There will also be limited exceptions
to this rule, recognizing that there are some borrowers with
credit scores below 620 that otherwise represent a low credit
risk.
4. Minimum loan documentation standards “to
ensure that there is evidence of reasonableness of property
value and of the borrower’s sources and level of income.”
The Department of Finance’s announcements today did
not elaborate on this point.
5. No government guarantee for high-ratio mortgages
where no amortization is required in the first few years.
This includes high-ratio mortgages that begin with “interest-only”
payments and HELOCs.
6. Maximum of 45% on borrowers’ TDS ratio
for new government-backed mortgages.
These changes are slated to take effect on October
15, 2008. There is still a
limited time for clients to obtain the zero down or 40-year
products, if they so choose. Current 90 day pre-approvals
would not be affected. Exceptions would be allowed
after October 15th where they are needed to satisfy a binding
purchase and sale, financing, or refinancing agreement entered
into before October 15, 2008. Canadians who already hold mortgages
will not be affected by these changes.
The Department of Finance stated that “today's announcement
marks a responsible and measured approach by the government
to ensure Canada's housing market remains strong and to reduce
the risk of a U.S.-style housing bubble developing in Canada.”
It also noted that mortgage arrears in Canada have remained
low in recent years.
Shawn Kusch, AMP
Senior Mortgage Consultant - INVIS
www.shawnkusch.com
Tel: 604-598-9973
Fax: 604-598-9982
"low mortgage rates are just the beginning..."
May
2007
There
is now a
Tree Cutting Regulation Bylaw
in Delta
In December of 2006, Delta Council
adopted a bylaw requiring permits to cut trees in Delta. The
purpose of this bylaw is to regulate the cutting and replacement
of trees through a permit process. This bylaw requires a level
of protection and replanting requirements that will help ensure
the urban forest is preserved and maintained. Before cutting
a tree, property owners are advised to review the permit requirements
and exemptions. Details
»
Conventional financing now
available up to 80%
In the past in order for clients to avoid having to pay a
CMHC/Genworth insurance premium for their mortgage financing
they were required to put down at least 25% of the purchase
price towards the down payment. Now with the recent changes
in policies clients are only required to put down 20% of the
purchase price for down payment in order to avoid paying any
insurance premiums which will end up saving them money.
Amortization extension up to 40 years
Previously the maximum term a mortgage could be amortized
over when determining mortgage payments was 25 years. However,
recognizing that housing prices are continuing to increase...in
an effort to make properties affordable for clients to purchase
into the lenders have now supported amortization extensions
up to as high as 40 years. By extending the amortization will
lower a clients monthly payment obligation and therefore even
though the property values have increased, with the extension
of the amortization this will allow clients to be able to
afford that property and won't have to settle for a property
of lesser value or be forced to consider moving away from
the lower mainland.
An example would be if a client qualified for a $300,000 mortgage
based on a 25 year amortization...when extending the amortization
to 40 years the client will now qualify for a mortgage as
high as $361,000. On the flip side a payment for a $300,000
mortgage based on a 25 year amortization would be approx.
$1,787.75 however by extending the amortization to 40 years
the monthly payment on the same $300,000 borrowed would drop
to $1,485.24 per month...a difference of $302.51 per month.
If you require additional information please feel free to
contact me anytime!
Shawn Kusch, AMP
Senior Mortgage Consultant - INVIS
www.shawnkusch.com
Tel: 604-598-9973
Fax: 604-598-9982
"low mortgage rates are just the beginning..."
Trisha
Calam joins FinerChoice Team!
Darrell & Sharon are
excited to announce that Trisha Calam, licensed
Realtor has joined our FinerChoice Team.
Trisha has been a Realtor for several years.
She has assisted us with a number of buyers since joining
Re/max Performance a year ago and we're happy to have her
on our team! She and her family live in Surrey and she
is involved in many aspects of the community including her
current position as President of the Surrey/White Rock Ringette
Association. She will be focusing on working
with Buyers in North Delta, Surrey, Cloverdale and White Rock.
We know that she will be a valuable asset to our team and
to your moving experience!
CMHC's
Flex Down Product
Released February 2004!
[Click on links below to access]
Flex
Down Background
Flex
Down Fact Sheet
Click
Here for the Fraser Valley Market Report and Statistics. |