BE INFORMED
GOVERNMENT OF CANADA TAKES ACTION TO STRENGTHEN HOUSING FINANCING
With the recent announcement by the government to its changes in Mortgage Financing that will take effect on April 19, 2010 one of the changes will have a BIG impact on purchasing power. What will the rate be that will be used to qualify borrowers on April 19th? This is still in discussions with the government who are favoring the posted rate. In the past mortgages have been qualified using the 5 year discounted rate which is generally 1.50% less than the 5 year posted rate.
If the Government gets it’s way this will mean less purchasing power for home buyers.
For Example: Today, the average qualifying rate for a mortgage is 3.89%. Based on the maximum amortized period of 35 years, subject to income and other payment obligations a borrower who qualifies today for a $285000 mortgage will have his mortgage qualification reduced to $236000 because the mortgage will be qualified on the higher posted rate. This will reduce the borrowers purchasing ability by $49000 Mortgage Amount at Mortgage Amount Loss of Purchasing Discounted Rate at Posted Rate Power $422000 $339000 $83000 $350000 $288000 $62000 $285000 $236000 $49000 $200000 $165000 $35000 $175000 $144000 $31000
If you are considering purchasing a new home in the near future please contact us to discuss your maximum mortgage qualification.
Garry and Linda Dicks 526-5445 Toll free 800-708-4133
Email: ldicks0407@rogers.com The Mortgage Centre – 260 King Street, MidlandTHINKING OF BUYING OR SELLING? |