New Mortgage Rules Aimed At Protecting Buyers From Themselves
The new mortgage rules which are expected to go into effect on April 19, 2010 are aimed at reducing the size of mortgages buyers can get. The federal government is in fact attempting to protect buyers, particularly first time buyers, from buying above their means. Home buyers who would have qualified under the old rules will still be able to get a mortgage however the amount may be less. Anyone looking for a CMHC backed mortgage will have to pass a credit test. A lender will have to ensure that a borrower can afford the monthly payments of a five-year fixed-rate mortgage, up from the previous three-years. And those looking to refinance their home will be able to borrow up to 90% of the assessed value of their home as opposed to the previous 95%.