The mortgage rules are change again Belleville and here’s what you need to know:
• You will need a bare minimum of 5% down payment and can NO longer use any cash back arrangement for your down payment.
• You will now only be able to amortize your mortgage for a maximum of 25 years on high-ratio deals.
• You may be required to have appraisals on your property and greater scrutiny will be applied to it’s marketability.
• You will need to qualify on the 5 year bench mark or posted rate if you are applying for a variable rate mortgage or 1-4 year fixed rates.
• You can still get a home equity line of credit but only up to 65% the value of your home.
• If you are self employed your challenges in obtaining purchase financing or refinancing have increased
• Debt servicing coverage will specify any “qualification” parameters that should be used in calculating debt serviceability for the purpose of reducing risk.
• Qualification parameters could mean various ways of calculating how debt servicing will occur. This is the great unknown at the present time, as it is at the discretion of each lender to have clear and concise policies and procedures in place and communicate with the Broker on how to calculate unsecured lines of credit, student loans, balances of debt.
As you can see the rules are tighter and make things more difficult for First Time Buyers who no equity in a home already and for Self Employed borrowers. If you have any question feel free to give us a call and we can get an answer for you.