Have you been thinking now is the time to buy that new home in Spruce Grove, Stony Plain, Parkland County or the Edmonton area?  Make sure you read about the new rules for government-backed insured mortgages going into effect July 9, 2012. 

1)  Maximum amortization reduced to 25 years.  Until recently, amortization periods could be as long as 35 years.  That dropped to 30 years in 2011 but will now max out at 25 years.  The government points out that this allows Canadians to pay off their mortgages faster, meaning a faster build-up of equity and the payment of much less interest, but the bad news is many Canadians may no longer qualify for a mortgage.

2)   Maximum amount Canadians can withdraw in refinancing their mortgages decreased to 80% from 85% of the value of their homes.

3)   Maximum gross debt service ratio set at 39% and the maximum total debt service ratio at 44%.

4)   Government-backed insured mortgages only available to homes with a purchase price of less than $1 million.  Homes costing less than $1 million can still be purchased with 5% down but those above $1 million will require a down payment of 20%. 

Read the official Government of Canada announcement.

Wondering how to finance your home purchase?  I can help you find a lender.  Call or text me at 780-910-9669, email me at barry@barryt.ca, or contact me here.

Tags: home buying, Mortgages