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PostPosted: Mon Oct 24, 2016 9:09 am 
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Joined: Wed Jul 21, 2010 6:14 am
Posts: 62
Location: Milton, Canada
Hi Milton

Been taking lots of calls from people wanting to know how they are being effected by the new mortgage rules, especially from those who have new construction properties closing sometime in the future.

Oct 17th, 2016:
As of this date, all new purchasers with less than 20% down (High Ratio Mortgage) need to qualify using a Mortgage Rate Stress Test at the Government posted rate which is currently 4.64%. Prior to Oct 17th, if you were getting a 5 year fixed rate mortgage, you could qualify at the actual rate of say 2.39%. Now, you can still get the lower rate, but your qualifying ratio's need to be calculated using 4.64%. In other words, a previous purchase of $500,000 with 5% down needed $81,000 income to qualify. Now you either need $99,000 to qualify or the home purchase amount drops to $394,000.

Nov 30th, 2016 (May 1, 2017):
See refinance note below. Post Nov 30th, Low Ratio Mortgages (more than 20% down) will be treated the same way as the High Ratio Mortgages, if the mortgage is being insured by the lender behind the scene's. The rules include the higher Rate Stress Test, a maximum of 25 years, owner occupied property of less than a $1m, minimum credit score of 600 and maximum GDS/TDS of 39%/44%.

These changes will not apply to low-ratio mortgage loans where, before October 17, 2016:
- a mortgage insurance application was received; or,
- the lender made the loan or made a legally binding commitment to make the loan; or,
- the borrower entered into a legally binding agreement of purchase and sale for the property against which the loan is secured.
- The new low-ratio mortgage insurance eligibility requirements also do not apply if, during the period beginning on October 17, 2016 and ending on November 29, 2016, at least one of these three criteria is met and the loan is funded before May 1, 2017.

The Nov 30th date is very important for anyone needing to consolidate debt on a 30 year amortization.

Keep your questions coming.

Have a great day

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Warwick Johnston
Milton Mortgage Specialist at RBC
647-274-6029


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PostPosted: Mon Oct 24, 2016 12:09 pm 
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Joined: Mon Oct 26, 2015 9:49 am
Posts: 113
Hi Warwick,

Does the new mortgage rules applies to all pre-approved mortgages? Ours was pre-approved since November Last year with a letter that we gave a copy to Mattamy Homes.

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Hawthorne South Village - Phase 6
Midland Corner - Craftsman Elevation
Leger way
Delayed Closing date April 18, 2017
Moved in date May 18, 2017


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PostPosted: Mon Oct 24, 2016 3:28 pm 
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Joined: Wed Jul 21, 2010 6:14 am
Posts: 62
Location: Milton, Canada
Hi pong55
The pre-approval will depend on the bank that issued it as to whether they will honour it, but the Mattamy Purchase Offer will ensure you are not effected by the new rules.

Here are the exclusions to the new rules for insured purchases with less than 20% down prior to Oct 17, 2016:
- a mortgage insurance application was received; or,
- the lender made the loan or made a legally binding commitment to make the loan; or,
- the borrower entered into a legally binding agreement of purchase and sale for the property against which the loan is secured.
- The new low-ratio mortgage insurance eligibility requirements also do not apply if, during the period beginning on October 17, 2016 and ending on November 29, 2016, at least one of these three criteria is met and the loan is funded before May 1, 2017

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Warwick Johnston
Milton Mortgage Specialist at RBC
647-274-6029


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PostPosted: Tue Oct 25, 2016 7:38 am 
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Joined: Mon Oct 26, 2015 9:49 am
Posts: 113
MortgageSource wrote:
Hi pong55
The pre-approval will depend on the bank that issued it as to whether they will honour it, but the Mattamy Purchase Offer will ensure you are not effected by the new rules.

Here are the exclusions to the new rules for insured purchases with less than 20% down prior to Oct 17, 2016:
- a mortgage insurance application was received; or,
- the lender made the loan or made a legally binding commitment to make the loan; or,
- the borrower entered into a legally binding agreement of purchase and sale for the property against which the loan is secured.
- The new low-ratio mortgage insurance eligibility requirements also do not apply if, during the period beginning on October 17, 2016 and ending on November 29, 2016, at least one of these three criteria is met and the loan is funded before May 1, 2017



That's a relief, thanks Warwick.

_________________
Hawthorne South Village - Phase 6
Midland Corner - Craftsman Elevation
Leger way
Delayed Closing date April 18, 2017
Moved in date May 18, 2017


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PostPosted: Wed Nov 02, 2016 9:48 am 
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Joined: Mon Oct 26, 2015 9:49 am
Posts: 113
TD Bank Raises Mortgage Rates In Wake Of New Rules

http://www.huffingtonpost.ca/2016/11/01 ... 54620.html

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Hawthorne South Village - Phase 6
Midland Corner - Craftsman Elevation
Leger way
Delayed Closing date April 18, 2017
Moved in date May 18, 2017


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