This morning Canada announced that it is tightening the mortgage rules so that potential homeowners don't get too much debt and be victims of mortgage loan speculators that promise more than what the reality is. The move has made many potential borrowers with many questions. Here are three areas that will be impacted by this change.
Ted Rechtshaffen, a Certified Financial Planner who runs TriDelta Financial this afternoon participated in a live chat, on Yahoo! News Canada and took questions, explaining the mortgage change announcement that was made this morning by Canada's Finance Minister Jim Flaherty.
Mortgage rule change to impact 3 areas
By Ted Rechtshaffen
First time home buyers can still buy a home with as little as 5% down. The only change is that when a mortgage lender calculates how much they are willing to lend you - that number will now be a little bit lower. This is because the government has stated the mortgage rate to be used ONLY FOR FIGURING OUT the lending amount, will be based on a 5 year fixed posted rate.
If you already have a mortgage but want to refinance and possibly consolidate debt - you can only consolidate debt up to 90% of the value of your mortgage. This used to be 95%.
If you buy properties for investment, they would require 20% down payment - although this will be hard to enforce.
Written by Armen Hareyan
HULIQ.com
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