Now that the dust has settled, and the repercussions of the new mortgage rules are becoming clearer, here are some points we’d like to address:
1. We’ve received many calls from panicked clients who are wondering how this will affect their current mortgage. These new rules only apply to new insured mortgages, meaning, if you currently have a mortgage in place, these new guidelines will not affect your existing mortgage. If you are considering refinancing your mortgage when it is time to renew, you may have to go through this new approval process.
2. The current requirement only applies to insured mortgages with variable rates or fixed rates less than five years. The new guidelines, effective October 17th, will apply to all insured mortgages, regardless of the term. This means in order to still be eligible for the current guidelines, any mortgage requests must be submitted to the insurer before October 17th.
3. These new measures will reduce the mortgage amount that insured buyers will be able to qualify for since the qualifying rate will now be much higher than the rate they would actually receive. We are expecting first-time buyers to be especially effected.
4. Changes also impact foreign buyers, who will now not be eligible for a capital gains exemption on properties that they sold after October 2nd, 2016, if they were not a resident at the time of purchase. This rule will stay in effect for any foreign purchasers going forward.
As always, we are completely dedicated to our clients and their housing happiness. The important thing to do is not panic, and to get the proper advice from a qualified mortgage specialist. We are here to answer any questions and concerns you may have and guide you through the mortgage process.
Call us today.