Mortgage Rules Toughened

Ottawa, it is Harder for Canadians to obtain a Mortgage!

OTTAWA will make it harder for people to get mortgages.Here are some of the changes that will affect home buyers when applying for a mortgage in Ottawa or any other place in the country. Rules take affect on April 19th 2010.

1. Ottawa will require that borrowers meet the standards for the five-year fixed mortgage, even if the buyer wants a mortgage, a variable rate. This applies to all first time buyers. If you are a homeowner with a mortgage is insured, you are not affected, unless they choose at a later time to extend the depreciation or see to refinance.

2. If you want to refinance your mortgage extracting the own funds of the maximum amount that can be dragged to 90% from 95%.

3. If you purchase an investment property, and you are looking for support of a Government mortgage, then you must be at least 20% down. This has changed from only 5%.

Mr. Flaherty said "there is no clear evidence of a housing bubble, but we take proactive, prudent and cautious steps today to prevent a," thanks a lot!He says it will stabilize the housing market and to do so is a good thing.The only problem I see with this is it closes the door of the home ownership to a lot of people.One of the real reasons for out of control, real estate prices are huge commissions carried out each time someone buying or selling a home.

I must be honest, there is a positive for all of this. here it is, just as most people would all like own their own home, and it is a good thing. the problem with the super low interest rates is that they do not last and when mortgage rates go up, so make your monthly mortgage payments. If your mortgage is greater than 3%, you pay $ 1,000 monthly rates go up to 4.5%-now your mortgage payment is $ 1400 and you could find yourself in a real bind. There is nothing to say, that they may go to 8,10 or 12% or higher. I can remember when mortgage rates in Ottawa was as high as 18%.

So the positive thing is it is kind of protecting people from themselves. If you are allowed to just press into a mortgage, a 95% placing yourself in a dangerous position financially and the rates go up, you are "hooped".

George Parker Ferguson f.i.c.