7 Mar

More on new Canadian guidelines for Mortgage Qualification for Purchases

General

Posted by: Leonore Claypool

So still some confusing information out there on the new guidelines. As I posted earlier, the maximum time you can amortize (or spread) your mortgage payments is 30 years effective March 18th.  That means you must have your purchase or refinance completed by March 17th. Completion is the date that the LEGAL mortgage documents are signed at the lawyers/notary and new funds advanced and the title to the property is registered at Land Titles Office. That’s not to be confused with the mortgage term. That is just the length of your contract with the lender and confirms the rate and agreement during that time. 

There are still some lenders that will allow longer amortizations. That catch is that you have to have at least a 20% down payment.  

If you are an employee you can still buy a home with a 5% down payment.  Gifted down payment from an immediate family member is still allowed. Also, there are still a few lenders that are able to to provide a FREE down payment and meet the federal requirements. Credit and job stability make it tough to get into this program but it is available. 

Self-employed home buyers need a minimum of 10% for a down payment.  It must come from their own resources so it cannot be borrowed or gifted.  

I know it sounds a little complicated. Honestly though it’s up to your mortgage professional to keep up on the guidelines and know which bank offers the best product for the type of mortgage you need.

 

2 Mar

Bank of Canada keeps Key Lending Rate at 1%

General

Posted by: Leonore Claypool

Once again everyone with a Variable Rate mortgage and line of credit can breath a sigh of relief! Yes, the Bank of Canada keeps the Key Lending rate unchanged. The Bank of Canada’s 1% means a Prime Rate of 3% for us consumers.

Still wondering where Prime is headed? Well you must realize that 1% is incredibly low. In order to stimulate the economy during the recession the rate hit rock bottom and was raised in September to 1%.  How much longer it will stay there will depend on many things. The Bank looks at the economy here in Canada and globally. Things like inflation, employment, exports and our dollar impact it’s decision.

While we didn’t expect a rate hike now most economist project one early as May or as late as the end of the year. We will know more at the next meeting when the Bank of Canada’s governing board is expected to send a clearer signal on April 13, when it next issues its quarterly outlook for Canada and the world.