{"id":455,"date":"2016-10-04T10:48:03","date_gmt":"2016-10-04T10:48:03","guid":{"rendered":"http:\/\/www.getmobileapp.ca\/mymortgagepros\/?p=455"},"modified":"2024-02-08T05:46:12","modified_gmt":"2024-02-08T05:46:12","slug":"new-mortgage-rules-comming-in-effect","status":"publish","type":"post","link":"https:\/\/mymortgagepros.com\/new-mortgage-rules-comming-in-effect\/","title":{"rendered":"New mortgage rules comming in effect"},"content":{"rendered":"<p><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/mymortgagepros.com\/wp-content\/uploads\/2017\/03\/testimonials-mortgage-broker.jpg\" alt=\"\" width=\"962\" height=\"337\" class=\"aligncenter size-full wp-image-636\" \/><\/p>\n<p>Over the past few years we have seen a large number of mortgage rule changes.\u00a0<\/p>\n<ul>\n<li>Maximum amortizations decreased from 40 to 25 years<\/li>\n<li>Terms less than 5 years required a borrower to qualify at a higher interest rate<\/li>\n<li>Refinances capped at 80% of a property\u2019s value<\/li>\n<li>Income for self-employed individuals had to be more verifiable<\/li>\n<li>Increased down payment for homes over $500,000<\/li>\n<\/ul>\n<p>And the list can go on and on.\u00a0We have heard rumors since March of this year that another round of rule changes were coming through but we were not 100% on exactly what they would entail.<\/p>\n<p><b>Why are they even worried about it you may ask?<\/b><\/p>\n<p>The reason is simple, they are heavily invested in our real estate market.\u00a0CMHC stands for the Canadian Housing and Mortgage Corporation which is owned by the federal government.\u00a0\u00a0They are issuing insurance policies that they are potentially going to have to cover losses on from tax payer\u2019s money if\/when people stop paying.\u00a0<\/p>\n<p><strong>1. Mortgage Stress Test<\/strong><\/p>\n<p>As of October 17th, 2016 all insured mortgages, regardless of term or type, will be required to qualify at the bank of Canada posted rate.To put that in perspective:<\/p>\n<ul>\n<li>Family Income $80,000<\/li>\n<li>Monthly Debts $500<\/li>\n<li>Property Taxes $3,500<\/li>\n<li>25 years term\u00a0(Qualification rate today is 2.39% and after will be 4.64%)\n<\/ul>\n<p>Today that family can buy a home worth approx. $393,000 but after the 17th that drops to $310,000.\u00a0That is a large decrease to say the least.<\/p>\n<p>The rate you pay will not change, just the interest rate we have to use to qualify you for the loan.Safer LendingMortgages with a loan to value of less than 80% were not subject to the same stringent rules as those with less than 20% equity.\u00a0As of November 30th, 2016 that will change and mortgages will all be subject to the same lending criteria.<\/p>\n<p><strong>2. Closing Loopholes and Managing Tax Fairness<\/strong><\/p>\n<p>There is a proposed change to the tax laws on the table as well.\u00a0They want to make sure that the Capital Gains tax exemption on a primary residence is not abused by either residents or non-residents buying and selling a primary residence within the same year.\u00a0\u00a0This is in all likelihood an attempt to cool Toronto and Vancouver markets.<\/p>\n<p><strong>3. Managing Risk and Protecting Tax Payers<\/strong><\/p>\n<p>The final piece in the announcement is a little bit unclear as to exact ramifications.\u00a0Currently CMHC and the other mortgage insurers take on all the risk associated with mortgage default.\u00a0They are planning to implement a consultation process on a policy option where mortgage lenders would have to manage a portion of their loss.\u00a0\u00a0We will have to wait and see what exactly happens from here.<\/p>\n<p>So there you have it.\u00a0Getting a mortgage just got even harder and it doesn\u2019t matter if you walk into your trusted branch or go through a <a href=\"https:\/\/mymortgagepros.com\/mortgage-consultation.html\" target=\"_blank\" rel=\"noopener noreferrer\"><b>mortgage broker.<\/b><\/a>\u00a0The rules have changed for us all.<br \/>I cannot stress enough the necessity of making sure you speak to a well-qualified mortgage <a href=\"https:\/\/mymortgagepros.com\/home-buyers.html\" target=\"_blank\" rel=\"noopener noreferrer\"><b>professional<\/b> <\/a>before you make any decisions about buying or selling in case you are one of the folks affected by these changes.\u00a0I will keep you up to date on any changes which come down the road.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over the past few years we have seen a large number of mortgage rule changes.\u00a0 Maximum amortizations decreased from 40 to 25 years Terms less than 5 years required a borrower to qualify at a &#8230; <a href=\"https:\/\/mymortgagepros.com\/new-mortgage-rules-comming-in-effect\/\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[5],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How New Mortgage Rules Affect Your Mortgage Loan | Mortgage Loans from Private Lenders<\/title>\n<meta name=\"description\" content=\"Get all information and changes comes in mortgage rules &amp; know how they affect new mortgage loan. 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