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Archive for June, 2012

Are You Aware of The New Mortgage Changes???

Friday, June 22nd, 2012

Today (June 21, 2012), the federal government announced amendments
to government-backed mortgage standards
in Canada that will take effect on July 9, 2012.

Jim Flaherty, Minister of Finance, announced the following changes to the standards
governing government-backed insured mortgages:

  • the maximum amortization period was
    reduced from 30 years to 25 years;
  • the maximum amount Canadians can withdraw
    in refinancing their mortgages was lowered to 80 per cent from
    85 per cent
    of the value of their homes;
  • the maximum gross debt service ratio was
    fixed at 39 per cent and the maximum total debt service ratio
    at 44 percent; and
  • the availability of government-backed insured mortgages was limited to homes with a purchase price of less
    than $1 million.
  • Today’s announcement confirms Canadians will continue to be able to purchase a home with
    five percent down.

In response to the announcement, AREA member and CREA President Wayne Moen issued the following
statement:

“We believe today’s announcement is a measured response to the government’s often stated concern about
household debt levels and the housing market. That being said, we would remind the government that the re-sale housing makes
a significant contribution to the economy, adding an estimated $20 billion in spin-off spending and over 
 165,000 jobs in 2012.

Recent statistics from The Canadian Real Estate Association indicate that the national housing market remains
balanced. The impact of measures like those announced today must be closely monitored to ensure they have the anticipated
impact and don’t create a spillover effect and slow the economy.
For these reasons, going forward, we
would urge the government to consider the impact of further interventions in the market carefully.
REALTORS®  and the government share a common interest in the value of homeownership and its contribution to the economy and the well-being of Canadians and our communities. Property buyers and sellers should
contact a REALTOR® if they are considering entering the housing or commercial real estate markets to better understand the impact of these changes in their communities.”

This is great food for thought, and further assurance that using a realtor in any property transaction is well worth it. As the amortization maximum slims down, you may want to consider buying or selling sooner, rather than later. 🙂

 

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