Dan Welyk Realtor®  Since 1999

There Is No Substitute for Experience.

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Zero down mortgages and 40 year amortizations will be a thing of the past in October 2008.

For the home buyer who was planning on using the zero down option, the government will allow the 5% to come as a loan by line of credit, it just will not be insured. Some lenders do offer options for these buyers, I recommend contacting our mortgage specialist to ask questions about what lenders offer what.

With respect to the loss of the 40 year amortization - it is expected that the average Canadian will only be paying $55.00 more per month to utilize a 35 year amortization. For most, this will not be an issue - for a select few, it will force them to save for a larger downpayment or lower valued home.

Another change was the minimum credit (or beacon) score was raised to 620 to qualify for a government insured mortgage. Credit scores are numeric value that measures the borrower's risk based on statistical information on there credit report.

The reason for this is to reduce the risk of the US style real estate/mortgage crisis. Canada has always maintained stronger lending rules than the US, however they government is simply protecting it's taxpayers.

For more information on this, visit the Department of Finance Website here.

 

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