As we have all witnessed in the last couple of months, the Canadian economy, including housing and countless other sectors have been greatly affected by the COVID-19 pandemic.
The Canada Mortgage and Housing Corporation (CMHC) is bringing in the following changes to limit their assumed risk by changing policies for Insured Mortgages (when someone is buying with LESS than a 20% down payment).
Effective July 1st, 2020 the CMHC will be making the following changes:
- CMHC is lowering the percentage of your income that can go towards paying your mortgage / taxes / heat from 39% to 35%.
- Establish a minimum credit score of 680 for at least one borrower. (previously 600)
- Non-traditional sources of down payment that increase indebtedness will no longer be treated as equity for insurance purposes.
What does this mean for you?
- The average consumer who has less than 20% down will now have their max purchase price reduced 12%.
- Your credit score must be higher.
- You will no longer be allowed to borrow your down payment. (Gifted funds from family is still ok)
If you or anyone you know have questions regarding these new changes and how it applies to your own personal situation please reach out to our team. We want to inform, equip, and help you navigate these new changes.
Although our physical doors may be closed to respect the CDC and Government of Canada’s guidelines, our ability to help you during this time is not. We can chat over the phone, email, text or start a video call anytime.
If you have questions or are looking for advice about your mortgage/investments, we are all here to help, any day, any time. Our time costs you nothing.
The new normal for us is simply being present! Our team members are operating out of their homes, and in Eilisha’s case, a cabin in the Cariboo. Jordi and Dave Browne are available 24/7 to provide you with the latest news and counsel for everything mortgage-related, while Eilisha brings a sense of calm and order during an unpredictable time. Dave Saran is as focused as ever and Stephanie is utilizing her home office and creative noodle to produce innovative and exciting content for the Browne brand.
We are all trying to make a new “normal” from home, whether it’s; supervising a son building his own skateboard ramp, teaching your daughter to drive a golf cart, watching an eagle dive bomb a fish on the frozen lake, homeschooling, or playing the Nintendo Switch that your boss lent you. Regardless of your new “normal” it’s important to maintain structure and also pursue mental and physical health.
Every day it seems like we are watching our TV screens waiting for more news from the Canadian Government and their support to its Canadian citizens during this time.
We hope by sharing this Canadian COVID-19 Economic Response Plan we can clarify and show you how the government plans to help during this time.
Our team at Browne Mortgages + More are here for any questions you may have. Call, text, or ask to arrange a video call!
→ EFFECTIVE March 23, 2020 ←
The Bank of Canada will be reducing the qualifying rate by 0.15%, from 5.19% down to 5.04%.
Resulting in a 3% increase in qualifying ability, also equivalent to $15,000 more house for every $500,000
This change will not only make it easier for first time home buyers to get into the housing market but also allows access to more equity for home renovations, debt consolidation, etc.
- Access to more equity
- Buy more home