The Finance Minister announced some new mortgage rules that will affect the mortgage and real estate industry. I would suggest you contact any clients and Realtors that you are dealing with that may be sitting on the fence about purchasing or re-financing to make their decision now.
Here’s a summary of the decisions made:
- High ratio financing amortized at a maximum of 30 years instead of 35 years. This is for purchase and refinances with less than 20% down, however, you may see some lenders follow suit with conventional financing.
- Refinances can only go to a maximum of 85% instead of the current 90%.
- Removing federal government backing on HELOCs (home equity lines of credit).
These changes take effect March 18th, except for the HELOC rule which takes effect April 18th.
Again, if you have anyone who has been sitting on the fence waiting out the interest rates to purchase a property or refinance their home and they need to refinance at 90% or need the 35 year amortization I suggest you contact them immediately to get them in before the deadline date.