For Home shoppers that have been considering a home purchase in the last 6 to 12 months, the rush is now officially on to try and see if a new home can be found and mortgage financed before all the related acquisition costs go up.
Right now we are experiencing the confluence of three different factors converging on the mortgage market, and creating a perfect storm effect for home buyers in the process.
First, we have the recently announced increase in the five year mortgage rates that have already come into effect. For those that have secured a pre-approved mortgage rate for 120 days, the race is on to try and get a home purchased and financed in time before the rate freeze is removed.
Second, in just 5 days, the CMHC’s new qualification rules will come into play for new home purchases requiring more than 80% mortgage financing. For these higher ratio mortgage applications, mortgage insurance is required and will now make it more difficult for some home owners to get qualified based on the revised repayment qualification calculations that require the use of the chartered bank posted 5 year fixed mortgage rate.
Third, and somewhat forgotten in all the recent news about interest rate increases and changes in the CMHC mortgage insurance program, is the launch of HST in Ontario and B.C. on July 1, 2010. The new tax will create an added cost to home purchases that will also have to be factored into a buying decision.
The key takeaway from all of this is that home shoppers should make sure they are working with a competent mortgage broker that can help them work through all the twists and turns impacting residential mortgage financing in the coming months.
The landscape is got increasingly hard to navigate in 2010, so getting some professional assistance can help you make a better decision and end up saving you money in the process.
If you’re in the process of buying a home or even have an accepted offer that requires mortgage financing, I suggest that you give me a call so I can quickly assess your requirements and provide relevant mortgage options for your consideration.
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel