Who does this impact? People making a home purchase with less than a 20% down payment.
Things to note:
- This does not come into place until July 1st and only with CMHC purchases less than 20% down.
- These updates are a CMHC initiative under the national housing act, NOT a the Ministry of Finance.
- The other insurers have a meting next week with government and they would prefer to keep things the way they are. They don’t feel the losses that CMHC mentioned are consistent with there portfilios.
- They said our default rate is still below a half of a percent and even in the crisis of 2008 people still paid their mortgages.
- CMHC has a very different portfolio than the other insurers.
- With the deferral program ALL insurers were brought to the table. This update is ONLY CMHC and it was done under the National Housing Act NOT directed by the Ministry of Finance
Some other changes are relative to your credit score – one borrower has to have a score of 680 (average Canadian score is 650) – and you will not be able to use a borrowed downpayment.
We protect credit scores and help improve them by using only one application to shop all lenders. Most lenders already have these credit score minimums in place.
Most lenders already implementing the non-borrowed down payment policy and most who would take that route don’t have the income to qualify to do so anyway.
IF this is something the other insurers are forced to follow it will reduce buying power for those who need it most by 10% on average for those purchasing with less than 20% down.
We will be here to help you through all these changes when the time comes. We are available anytime at email@example.com to help guide you.
Angela Calla is a 16-year award-winning woman of influence mortgage expert. Alongside her team, passionately assisting mortgage holders get the best mortgage, and educating them on The Mortgage Show on CKNW for over a decade and through her best-selling book The Mortgage Code available on Amazon. To purchase the book click here: The Mortgage Code. Proceeds from all sales will be donated to Access Youth Outreach Services. Angela can be reached at firstname.lastname@example.org or 604-802-3983.