Late last year, the Canadian government really shook things up for the mortgage industry by releasing a series of updated regulations with regard to the property financing process from qualification to application and releasing.
These particular changes have since taken effect and people have been experiencing issues with multiple major alterations to regulations being applied at one time. Especially for those who are considering refinancing their current mortgages, it would be best to act as soon as possible.
For something like this, it would be best if you worked hand in hand with a professional. You can save a lot of time and rid yourself of numerous problems if you had a reliable mortgage broker by your side.
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Your chosen mortgage broker will be in charge of helping you find the best financing options including the lowest market rates. Aside from this, the broker will also assist you in negotiating with the lending facility, applying for financing or refinancing, and even help with payment processing.
In terms of refinancing, the qualifying rate has changed and not in the borrower’s favor. As the qualifying rate has increased, your ability to borrow money can go down by as much as 25%.
Also, lenders are also working to increase refinancing rates. With the new regulations in place, refinancing rates may increase by as much as 0.15%. This is a move to discourage people from opting for refinancing allowing lenders to get their money quicker or at least get more for waiting longer to get paid.
Also, amortization which normally spanned to 30 years will be no more. Now the maximum length is only 25 years despite the former being the chosen option by most Canadians.
But despite these changes, the government still made an effort to help Canadians pay off their mortgages amidst rising rates. Especially for loans that have been classified as having a high ratio as defined by being inclusive of a down payment that’s 20% or less, there’s a countermeasure.
For properties costing less than a million dollars at the time of purchase, a qualifying rate of 4.64% applies. If the borrower is able to satisfy this, they will be eligible for financing spanning 25 years.
Still, the old regulations are more in favor of the Canadian people as they can borrow a larger amount of money and pay the debt off across a longer span of time. 5 years can definitely make a huge difference. No deal can also compare to being capable of receiving a higher sum of money for a home.
This is why it is important that you work closely with a professional who can help you navigate through these new regulations. You want someone who can find you a better deal than what’s currently being offered.
Plenty of reliable professionals can be found online. But it would be better if you did ample research on the people that you’re considering. Ask questions, check their past work, ask for referrals if you can, and get that amazing deal.
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