You may hear enough there is a new rule coming effetive from July 9, 2012, but you are not sure how it may affect you and what is changed.
Followings are the summary of those changes mandated by the Department of Finance, Canada:
Maximum Amortization Available for Default Insured Mortgages
Maximum Amortization Available for Uninsured Mortgages
The maximum amortization for uninsured mortgages remains 30 years
Maximum Purchase Price
for Default Insured Mortgages
In
order to qualify for a default insured mortgage, the purchase price must
be less than $1 MillionMaximum Loan-to-Value Ratio (LVR) for Refinances
The maximum LVR for the refinance of an owner occupied property will be reduced to 80% (previously 85%)
Approvals – for Default Insured Mortgages Only
The following guidelines are based on the date the application was first received by the Default Insurer:
* Submitted on or before June 21, 2012. All loans qualify under previous guidelines
* Submitted between June 22, 2012 and July 8, 2012
- Purchases:
Where a legally binding purchase and sale agreement was signed
between June 22, 2012 and July 8, 2012 inclusive, 30 year amortization is
available. These loans must be funded by December 31, 2012
- Purchases: Where
a legally binding purchase and sale agreement was signed June 21, 2012 or
before, 30 year amortization is available. No restrictions apply to
the funding date
- Refinances: Where
a refinance is submitted between June 22, 2012 and July 8, 2012 inclusive,
the maximum loan-to-value ratio of 85% and 30 year amortization is
available. These loans must be funded by December 31, 2012
Amendments
All
amendments to existing approvals issued by a Default Insurer with a
binding purchase and sale agreement dated before July 9, 2012 will be
considered on a case by case basis by the individual Default Insurer
Pre-approvals for
Default Insured Mortgages
A
mortgage pre-approval without an agreement of purchase and sale is not
sufficient to qualify for a 30-year amortization. In order to
qualify for a 30 year amortization, the purchase and sale agreement must
be dated before July 9, 2012 and the mortgage insurance application
submitted before July 9, 2012.
Other
Straight Switch/Transfer from other Financial
Institution – Mortgages with remaining
amortizations greater than 30 years may be transferred as long as existing
mortgage terms are retained
For any question, please contact Dennis Ho email: dennisho98@gmail.com
