Now may be the best time to make that move to secure a new mortgage and be ahead of the proposed changes…
There are a few changes on the horizon for the Canadian real estate industry, and we wanted to keep you apprised as to what’s going on, and how it might affect you as a home-buyer.
The changes happening in the Canadian Mortgage industry might make it more difficult for some to secure financing for their new home. New rules for mortgage-borrowers say that they will have to prove to their financial institutions that their finances can withstand a two percent increase on their contractual mortgage rate. This new rule will apply to both variable and fixed mortgage rates, regardless of term.
These new rules come as the Bank of Canada will be increasing interest rates in summer 2017, for the first time in seven years.
Some experts are saying that this increase in interest rates won’t affect home-buyers or home owners as much as the possibility of a ban to co-lending arrangements and bundled mortgages. The regulator said it is considering “expressly prohibiting co-lending arrangements that are designed, or appear to be designed, to circumvent regulatory requirements.”
Canadian regulators are tightening lending standards to shield borrowers in case a decade-long housing boom goes bust.
“Bundled” or co-lending agreements with an unregulated entity can enable lenders to offer combined mortgages worth up to 90 per cent of a property’s value. Under federal rules, regulated lenders in Canada are not allowed to lend more than 65 per cent of the value of a home to borrowers with bad or nonexistent credit records.
Continue reading about how these changes might affect you as a home-owner or home-buyer: http://www.cbc.ca/news/canada/british-columbia/ofsi-mortgage-rules-1.4194012
As always, if you have any questions about making the move to Ucluelet, we are happy to help facilitate the move with you. It’s never too late to start living in Ukee!