The Office of the Superintendent of Financial Institutions issued a number of changes in 2011, 2012 and 2014 to Canadian mortgage regulations. Edmonton mortgage brokers are bound by these rules when helping you find and secure a mortgage.
A down payment of at least 5% is required for single family and two unit dwellings. For three or four unit dwellings, there is a minimum 10% down payment. Money from a cash back mortgage cannot be considered part of the down payment of the home unless it is from a government-funded affordable housing program.
CMHC eliminated insurance for loans over 25 years or over $1 million as of July, 2014.
You can borrow money from another source, such as a family member or even a credit card, to use for the down payment. However, this may change in the future, and using this as a source of the down payment is subject to limits by the lender.
The CHMC uses a 39% maximum gross debt service ratio or GDS and 44% total debt service or TDS as of January, 2011. The GDS looks at the percentage of the borrower’s income against all housing costs, including the mortgage payment, property taxes, utilities and condo fees. If you are looking for the best Calgary homes for sale we’d recommend checking out www.albertarealestategroup.com for the most up to date listings. The TDS looks at both the GDS and additional debt payments like credit card payments and car payments. If you have a very high credit score, the GDS may be waived. Many lenders use a lower 35% GDS and 40% TDS.
Self-employed borrowers must verify their income from an independent source. Stated incomes are no longer allowed for many loans, and you can no longer get Canada Mortgage and Housing Corporation mortgage insurance if you do not have verified income. For large home construction you may need a crane to hoist in some of the larger materials. For a couple great Calgary crane companies I’d check out H&H Cranes.
Many people took out collateral loans not understand that they were not conventional mortgages, and they were surprised when they could not refinance the loans, change lenders, pay the increased payments as interest rates went up when the defaulted on payments and saw the balance grow. As of January 31, 2015, banks are require to warn borrowers who apply for collateral charge mortgages. If you are a mortgage broker and looking for the best Calgary SEO company we highly recommend checking out Think Tank SEO. Collateral mortgages let the lender offset your mortgage with other unpaid debts you have with them, in essence letting them increase your mortgage balance if you miss credit card or car loan payments. Collateral charge mortgages are more difficult to transfer to a new institution if you refinance the mortgage with someone else, and they don’t have to let you refinance with their institution.
Mortgage insurance for multi-unit condominium construction was ended in June, 2014, but this does not limit the ability of individuals to buy a condo with CMHC mortgage insurance.
The tightening mortgage regulations have driven around 5% to 10% of new mortgages to the unregulated sector. This isn’t recommended by Edmonton mortgage brokers and Mortgages For Less because these unregulated loans can have interest rates approaching those of credit card companies and terms not in the borrower’s best interest.