Are you planning to get mobile home loans or, business loan this year? If yes, then make sure that you follow the new mortgage rules in Canada. By now, most of the people have already heard about the new mortgage rules that came into effect recently. The main aim behind these rules is to tighten the Canadian mortgage industry and protect the stability.
Here are the changes in the new mortgage buying process:
1) Borrowers with less than 20 percent down payment are required to qualify the bank of Canada stress test. Those paying more than 20 percent, will not require qualifying it.
2) Foreign home buyers or sellers will have to prove that the property is their primary residence, to avoid capital gains tax exemption abuse.
3) The government will restrict the insurance on mortgages to loans on owner-occupied dwellings with paying back periods less than or equal to 25 years. And the minimum credit score should be 600.
The new changes have brought with them a whole new world of both ‘pros’ and cons’. The advantage being that all the big banks that have deposits to cover predictable mortgages do not need portfolio insurance, which makes the market less competitive for them. Also, the people, who have been complaining about the old rules can now buy their desired property easily.
Similarly, there are some disadvantages too.Homeowners will have to face more challenges in selling their houses and those who bought a home recently. As for the builders or sellers, it will become all the more difficult to sell their property. Even though mortgages are no more expensive from now, Canadians have to face the anti-competitiveness in the mortgage markets. The loans for bad credit will become more complex and confusing.
Now, even though a slow market doesn’t sound very beneficial but still there are some possibilities if you want to buy or sell your property. For instance, if you live in Edmonton, and want to buy a property for $450k but the limit is under $380k, it is hard to get a suitable property. But when you sell a $450k house to a displaced Toronto citizen who sold for $730k, you might have a buyer in your hands. Just talk to a skilled agent, who can help you get the best deals available.
CA Financial is the leading Finance company in Edmonton, which provides financial assistance through easy loans and bad credit loans Canada. If you need any further guidance, then they will support you in the best possible manner.
To know more, log on to Ca-financial.com.