More Info On New CMHC Refinance Rules
“CMHC Provides Additional Clarity Regarding New
Mortgage Refinancing Rules”
The newly proposed mortgage refinancing rules for insured mortgages that will reduce the amount that can be refinanced under an insured program 90% to 85% starting March 18 of 2011 did not allow an exemption for existing collateral mortgage holders looking to change lenders.
Most collateral mortgages require a mortgage refinancing to move from one lender to another. But if an existing mortgage has a balance outstanding in excess of the 85% threshold outlined under the new refinancing rules as initially described, the borrower would not be able to change lenders. This initially appeared to be reducing mortgage choice and opportunity from certain individuals who held down insured mortgages greater than 85%.
This week the CMHC came out with a further clarification to the rule change and stated that an exemption to the rule would allow for mortgage transfers for insured mortgages over 85% loan to value to take place provided that there was no increase to the mortgage or any increase to the amortization period.
In the past, the CMHC did not have any restriction towards mortgage transfers from one lender to another for mortgage amounts over 80% loan to value.
With the clarification, the new rule as fully described would now appear to more fully cover the different scenarios existing mortgage holders may in counter if they find themselves in a refinancing situation.
Keep in mind that while CMHC will allow the refinancing to take place under the borrower’s insured mortgage status, mortgage lenders will still have to approve any and all mortgage refinancing requests under their own criteria.
Some mortgage programs will not take over an insured mortgage if its above a certain loan to value level that is set by the individual lender. So while the CMHC is not technically going to be a barrier to limit choice in the market place for those individuals with high ration mortgages that want to change lenders, the individual applicants are still going to have to fit into mortgage programs that are interested in these types of deals.
To get more information on the new rule changes or any other insured mortgage requirements, please give me a call and we’ll get all your questions answered as soon as possible.
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About the Author Joe Walsh
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