Cash, Credit or Home Equity. . . No more?

Jan 17, 2011 by Todd Purcell

Finance Minister Flaherty announces he is stepping up his efforts with war on household debt

This morning, Monday, January 17th, 2011, approximately eleven months after the Finance Minister Jim Flaherty announced the new regulations that took place April 19th, 2010, a new set up regulations has been announced to take place on March 18th, 2011. As a reminder of the changes that took place on April 19th, the Finance Department instituted the following changes to the mortgage market of Canada:

• LTV (Loan to Value) for refinances was dropped from 95% to 90% equity (does not apply to new purchases)
• Loans of greater than 80 LTV must qualify based on the Band of Canada’s (BoC) 5 year posted rate (except when term applied for is a 5 year fixed or greater, in which case the contract rate is used for qualifying)
• Revenue properties must have a minimum of 80% LTV

The new regulations to start mid-March follow the trend started last year, an aim to minimize consumer debt by making it more difficult to access the equity in your home. The new mortgage of 2011 will have the following restrictions:

• LTV for refinances will again to dropped from 90% to 85%
• Maximum amortization period will drop from 35 years down to 30 years
• The government of Canada will no longer back Home Equity Lines of Credit (HELOC)

The new rules and regulations are intended to help Canadians save for the future and not have to rely constantly on refinancing their homes to get bail themselves out of high credit card debt, but to many mortgage industry professionals this comes as another heavy blow to an already highly regulated industry. Many would rather see the focal point for Canada’s high debt load be redirected at the reasons for the majority of consumer debt which is high interest credit cards, unsecured loans and auto loans. Many of these loans can be acquired with little to no qualification guidelines or rules to who qualifies for the loan, and many times can be acquired even after a mortgage has been put in place where the client was maxed out of their debt servicing levels to acquire their home financing.

Calgary Mortgage News

Calgary Mortgage News is dedicated to bringing you the news affecting your home. We try to deliver the the news in as unbiased a fashion as possible, but at the same time we want to provide insight and opinion on how this news will ultimately affect you. We also recommend you contact a Calgary Mortgage Broker or Mortgage Professional to present the options available to you, and to guide you through the decision making process.

Welcome to Calgary Mortgage News

Dec 29, 2010 by Todd Purcell

Welcome to Calgary Mortgage News!

Welcome to Calgary’s new Real Estate information source. There is typically a lot of information regarding your home and your home financing options that is spread in several different directions. The mission of Calgary Mortgage News is to bring the information that affects your home to one location and make sense of it. The best example of why this information is needed is the confusion created when the Finance Department of Canada made changes to the rules in the mortgage system of Canada on April 19th. We kept hearing from multiple different sources that they could no longer meet the down payment requirements because of the increase in minimum down payment required. We do not who was releasing such misinformation as the only changes to equity requirements were for refinanced and investment properties, no changes were made to down payment for purchases.

What can you expect from Calgary Mortgage News? Highly informative articles, with as little bias as possible, either negatively or positively about the housing industry. You will get our opinion on the article and what we believe it means for the mortgage industry in Calgary and what it means for you and your family.

Thank you for visiting our site!

Sincerely,

Calgary Mortgage News!