With the recent changes to mortgage laws implemented by the Bank of Canada that will be put into effect Monday, July 9, we here at Fieldgate wanted to break down what these new rules mean for you.
To simplify it, there are two main changes to the laws:
- The maximum amortization for a government-insured mortgage will now be 25 years from 30 years.
- The gross debt service ratio, which is the carrying cost of your new home (mortgage, taxes and utilities) when the mortgage is insured, must not exceed 39% of your family household income.
If you have purchased a new home or are planning on purchasing a new home before July 9, 2012, we strongly suggest obtaining a FIRM MORTGAGE APPROVAL prior to July 9. A Firm Mortgage Approval will guarantee your mortgage amount until you close on your new home.
At Fiedlgate Homes we have a discounted rate (discounted from the posted rate) in place for our purchasers that gives them a prefrerred rate guarantee until closing and gives our purchasers piece of mind provided they have a Firm Mortgage Approval.
If you do not obtain a Firm Mortgage Approval prior to July 9, 2012, then you may be subject to higher standards that you many not qualify for.
For Fieldgate Home buyers, we recommend that if you have have competed your upgrade selection with our Decor Centre that your financial institution has been provided a copy of the amendment to the purchase price (if applicable) and has also been provided a list of your upgrades.
These should be sent to your financial institution prior to July 9, 2012, because any changes may affect your current qualification after this date.
If you have any questions or concerns please do not hesitate to contact your Fieldgate Homes sales representative and they can refer you to the Bank Representative that supports the Sales Centre. As always, you can reach out on Twitter or Facebook.