Well, we finally have some details and insight for the 2011 housing market, and it's about to get tougher for new home owners, and even those currently in the market.
There have been significant announcements this week for everyone interesting in buying or selling a home. Timing is everything, and it appears that once again, there will be some significant changes that you need to be aware of.
Considering the forecast for the Calgary Housing market to start increasing in pricing, and the tighter mortgage rules that will be coming into force in 60 days, now might be a vital window for home owners that are currently considering a move.
It is especially urgent for homeowners who are currently wishing to sell their current homes and lock in a new mortgage rate on a newly purchased home. With only 60 days to finalize before the new rates come into effect, it will be a challenge to get a home on the market and sold in time to take advantage of the current status. The up side is that over the next two months, the market may get very fluid with those who need to take advantage of the current mortgage rules.
I received the following details from one of my mortgage specialists advising that there will be some major changes in how mortgages are approved. This is a significant tightening for those of you who are currently considering purchasing a new home.
1. No more 35 year amortizations
As of March 18, 2011 all insured deals will be allowed a 30 year amortization. Any fully signed contracts whether it be a purchase or refinance committed to by CMHC on or before March 18 will be honoured over 35 years. You cannot have an increase in price after this date - if you do, you will be subject to the 30 year amortization.
2. Refinancing has been scaled back to 85%.
As of March 18th, home owners will have access to 85% of the value of a home instead of the current 90%. This will affect you as a home buyer when you take equity out of your home for a down payment. In this case, you won’t be able to get as much funding up front and your monthly payments will be higher.
Current and potential buyers please note that the magic date is March 18th, 2011.
On a $450,000 purchase with 5% down, this would save you $200.00 per month in mortgage payments and your affordability increases by 3%.
For those who are considering a home purchase requiring an insured mortgage (less than 20% down payment), you will want to complete pre-approval and possession of home prior to March 18 2011.
If you are currently sitting on the fence as to whether or not to make your move it is important to understand that buying today will save you money in the long run. After March 18th, this window will be closed.
If you are currently considering a home purchase and would like to speak to a mortgage specialist, I have excellent resources who are very talented in obtaining financing. Please feel free to call me at 403-399-0809 and I will put you in touch with someone who can assist you according to your current circumstances.
For further information on these changes, and the background associated, here are a few links you can visit:
The Harper Government Takes Prudent Action to Support the Long-Term Stability of Canada’s Housing Market
Backgrounder: Supporting the long-term stability of Canada’s housing market
CALGARY HERALD ARTICLE: FeDERAL GOVERNMENT TIGHTENS MORTGAGE RULES AGAIN
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