under 5 years and VARIABLE mortgages at discounted contract rate. There was also NO LIMIT for your GROSS DEBT SERVICING (GDS) if your credit was strong enough. Relaxed lending guidelines when debt servicing secured and unsecured lines of credits and heating costs for non subject and subject properties. JULY 2008
We saw the elimination of 100% financing, the decrease of amortizations from 40-35 years and the introduction of minimum required credit scores all took place during this time period. It was also the time in which the Total Debt Servicing (TDS) could only be maxed to 45% APRIL 2010 This time period saw Variable Rate Mortgages having to be qualified at the 5-year Bank of Canada’s posted rate along with 1-4 year Fixed Term Mortgages qualified at the same. There was also the introduction of a minimum of 20% down vs. 5% on investment properties and an introduction of new guidelines on looking at rental income, property taxes and heat. MARCH 2011 The 35-year Amortization dropped to 30 years for conventional mortgages, refinancing dropped to 85% from 90% and the elimination of mortgage insurance on secured lines of credit. JULY 2012 30 year amortizations dropped again to 25 years for High Ratio Mortgages (less than 20% down). Refinancing also dropped down this time to 80% from 85%. Tougher guidelines within stated income mortgage products making financing for the Business for Self more challenging and the disappearance of true equity lending. Perhaps the three biggest changes of this time were: * Ban mortgage insurance on any million dollar homes * 20% min requirement for down payment * Elimination of cash back mortgages * Federal guidelines Min; requirement of 5% down * Introduction to FLEX DOWN mortgage products FEBRUARY 2014 Increase in default insurance premiums. FEBRUARY 2016 Minimum down payment rules changed to:
JULY 2016 Still fresh in our minds, the introduction of the foreign tax stating that an ADDITIONAL 15% Property Transfer Tax is applied for all non residents or corporations that are not incorporated in Canada purchasing property in British Columbia. WHAT IS TO COME? OCTOBER 17, 2016: STRESS TESTING INSURED mortgages with less than 20% down Have to qualify at Bank of Canada 5 year posted rate. NOVEMBER 30, 2016: MONOLINE LENDERS In addition, Portfolio Insured mortgages (monoline lenders) greater than 20% have new conditions with regulations requiring qualification at the Bank of Canada 5 year posted rate, maximum amortization of 25 years, max purchase price of $1 Million and must be owner occupied. BOTTOM LINE: Homeowners will experience the following: 1. QUALIFY FOR LESS-25% less • Options for mortgages will decrease as certain lender’s guidelines will no longer meet the federal criteria • No more rental or investment properties to be insured 2. CAPITAL GAINS • Can only be claimed 1x per year. • Measure taken against the recent flipping of assignments to avoid property transfer tax from investors in the last 2 years As always, we’re here to help with all your mortgage questions and needs. Feel free to drop me a line at [email protected] or give me a call at 647-893-2535. Sign Up Here for Monthly Mortgage Updates
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