Vertuity Mortgage Helping Home Buyers with New Rules
7th Dec 2016
Recent rule changes for mortgages has made buying a home in Canada more complex. Winnipeg mortgage brokerage Vertuity Mortgage is helping its customers navigate the new rules and complexities of home buying.
One of the major rule changes is the mortgage stress test. As of October 17, 2016, all insured mortgages are to be tested at a stress test rate based on the Bank of Canada’s posted five-year fixed rate (currently 4.64 per cent). This rate is higher than the rate being offered by lenders. The stress test changes the price of a home most people can afford. Other rule changes affect the type of mortgages available to borrowers as well as non-Canadian residents avoiding capital gains tax when selling properties.
Interest rates are rising. TD Bank as well as Royal Bank have increased fixed mortgage rates in recent weeks. Mortgage rates could rise for some types of borrowers. Buyers competing for fewer available mortgages could lead to higher interest rates. Locking in the best mortgage rate available has always been important. With rates rising its going to become more important.
In November, 2016 the Canada Mortgage and Housing Corp. (CMHC) said raising the down payment for homeowners with loans backed by federal mortgage insurance could be a possibility. In 1998, the minimum down payment for first-time home buyers was 10 per cent. The Canadian government reduced the minimum down payment to five percent, then down to 0% to boost the economy.
CMHC insured mortgages currently must have a property value below $1 million. For a purchase price of $500,000 or less, the minimum down payment is 5%. For a purchase price above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion. Higher down payment requirements could make it even harder for first time home buyers.
With the rule changes, higher interest rates and possibly higher down payments Canadians may find it harder to purchase a home. Your mortgage broker is a good person to known. Vertuity Mortgage is working with customers to adapt to the new changes and affordably buy a home. As a mortgage broker, Vertuity works with a broad base of lenders to find the right mortgage for a customer. Working with mortgage lenders on behalf of the client is an essential strength for Vertuity Mortgage. Every mortgage lender is affected by the recent mortgage rule changes and must adjust. Vertuity Mortgage understands the rule changes and can work with lenders on your behalf.
Some behavior changes may be needed as well. Some customers may be buying less expensive homes. Experts say the new mortgage rule changes could affect 10% of the home buyer market. Higher down payments may be required. Future home buyers may have to save for a larger down payment. In some cases a co-signor may be necessary.
There are a lot of options available to customers. Vertuity Mortgage wants to work with people to reduce the effect of the rule changes and help buyers get the best mortgage available for them. Vertuity Mortgage is Winnipeg’s leading mortgage brokerage and is available when you call.