Qualifying | Investing | Refinancing

The Canadian government's effort to mitigate residential foreclosure rates in the coming years stems from the following 3 major rules announced by Finance Minister Jim Flaherty back in February.

In Summary:

i) If you plan to qualify for a variable rate mortgage after April 19th 2010 expect your approval amount to be calculated off the 5yr posted fixed rate (currently 5.39%). A safe measure really, considering those that wish to sign up for a Variable rate mortgage will likely be paying a rate comparable to today's 5yr fixed in the coming few years.

ii) High Ratio Investors – Last Call! Anticipate a minimum 20% down payment for rental / investment property mortgages after April 19th, 2010. Considering the steep insurance premiums (upwards of 8.4%) high ratio investors pay on borrowed funds, it has been a risky model for “building wealth” on many levels in any case.

iii) Debt Consolidation: Currently, one can re-finance a property up to 95%LTV. After April 19th, 90% LTV will be the maximum refinance level. This understandable and proactive measure should help ensure home ownership remains an effective way to save.

These changes take effect nationally in a mere 25 days though some lenders are looking at implementing them sooner.

Call one of our Mortgage Specialists today for more information on how these new rules will affect you before, and after April 19th, 2010.