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GTA Real Estate Market Update, New Mortgage Changes - 2 Reason for Buyers to Make a Move Now

Still sitting on the fence about Buying a Home?  Maybe the new upcoming Mortgage Changes might help you make a decision.

The new changes coming into effect on October 15th may leave some First Time Buyers in a tight position.

  • CMHC has announced resinding the popular 40 Year Amortization Mortgage to a maximum 35 Years.   However, private-sector mortgage insurance rivals such as Genworth Financial, PMI Mortgage Insurance Co. Canada and AIG United Guaranty are free to offer the product.

But since Canada Mortgage and Housing Corp., which has an estimated 60 per cent share of the mortgage insurance market it's the big player so don't be surprised if many banks change their policies to reflect a maximum amortization rule.

This announcement marks a responsible and measured approach by the government to ensure Canada's housing market remains strong and that we do not follow the U.S. mortgage default record.

Last year, 37 per cent of new mortgages were for terms of longer than 25 years, according to the Canadian Association of Accredited Mortgage Professionals.  

The longer amortizations mean much greater interest costs over the life of the mortgage, but smaller monthly payments, which allows buyers to bid on a more expensive home than they otherwise could afford.

First time buyers that like the idea of a 40 Year Amortization still have time to take advantage before the current deadline.

No More Zero Money Down? 

CMHC will also start demanding a down payment equal to at least 5 per cent of the home's value, rather than guaranteeing mortgages where the buyer has borrowed the total amount.  Basically meaning the death of the Zero Money Down Programs offered through CMHC.   Again this does not apply to all other insurance companies, but there is no guarantee that others will not follow the trend.

So there are TWO Great Reasons for Buying a Home Before the October 15th changes take effect:

  • Zero Money Down
  • A 40 Year Amortization

Visit us at www.SuttonRealty.com to Search through our mls and exclusive homes for sale.

Visit www.GetMoneyInfo.com for a free On-Line Mortgage Pre-Approval.

Call us at 905-896-3333 or 416-896-3333 if you have any questions, we are happy to help find the perfect fit for you.

Mortgage Help in Toronto

 

 

 

Posted: Saturday, July 12, 2008 9:32 PM by Sutton Realty

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