New Mortage Rules for Home Buyers
By on Apr 18, 2008
Becoming a homeowner is an exciting time, but it can also be overwhelming! There are professionals to consult, new information to learn and budgets to consider. And with the federal government’s recent changes to mortgage rules, homebuyers have to consider additional factors when it comes time to negotiate their mortgage terms.
As of October 15, 2008, new rules apply to mortgages—for homebuyers who make a down payment of less than 20 percent on a property.
So what does this mean? It means that the maximum duration of a mortgage (the amortization period)—cannot exceed 35 years. The maximum amortization period was 40 years before the change. In addition, homebuyers now must make a minimum down payment of 5%. Previously, homebuyers could borrow 100% of the purchase price of their new home.
Beyond down payments and amortization periods, there’s still a lot to learn. When it comes time to answer questions like, should I rent or buy? or how much house can I afford? look for trusted information sources that help you make sense of the homebuying process and achieve homeownership faster.
A useful website to get you started is www.homeownership.ca, a first-time buyer’s guide to homeownership. The site explains the recent government changes to mortgage rules and also offers helpful tools, advice and information about the homebuying process in easy-to-understand terms.
Five things you should know about the new government mortgage rules
If you are planning to buy a home soon, here are a few things you should know about the federal government’s new mortgage rules which came into effect on October 15, 2008.
An informed homebuyer is a savvier homeowner; so if you’re in the market for a new home, learn all you can about the buying process and the government’s new mortgage rules. While the journey towards homeownership may seem complex, the more information you have at your disposal, the closer you’ll be to getting the home of your dreams!
