| April 19 Mortgage Lending Changes: Update by Richard Batke, Mortgage Broker |
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Variable Rate Mortgages & Short Term Fixed Rate Mortgages As of April 19 these changes take effect: All variable rate mortgages and fixed rate mortgages with terms of less than 5 years, CMHC insured (i.e. less than 20% down payment purchase or more than 80% Loan to Value refinance), will all be qualified at the current 5 year POSTED rate. This means, that your money will not go as far for high ratio mortgages. |
| Example: Today, you can qualify for a variable rate of 1.95% by being able to debt service at the current 3 year rate of 3.5%. The new rules would make us use the 5 year posted rate of 5.39%, which will reduce your purchasing power.
Someone who would qualify for a $200 000 mortgage now would qualify for $156 600 under the new rules for mortgages. 5 Year Fixed Rate Mortgages 5 year fixed rate mortgages for purchases will remain unchanged. Today, and under the new changes on April 19, the you would still qualify at the contract rate. Today's 5 year fixed rate is 3.69%. |
| Business for Self April 9 |
| This one is unfortunate for those business owners who are very good at reducing their taxable income.
The Stated Income Program will only be available for those who have been in business LESS than 3 years. If you have been self employed LESS than 2 years, your business must be in the EXACT line of work as your previous employment. Otherwise, the BFS Stated Income available for a window of less than 1 year, between your second and third year of self employment. CMHC feels that after 3 years, business owners should be producing enough taxable income to qualify for their mortgages. The maximum loan to value for the Stated Income Program has also changed: Purchases need 10% down minimum, and Refinances can go as high as 85% loan to value. Be sure to plan ahead if you are self employed! |
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| Rental Properties will require 20% down payment and all refinances will be restricted to a maximum loan to value of 80%, as of April 19. |
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Richard Batke - Mortgage Broker 2004 Main St. Penticton, BC V2A 5H4 Direct: 250-809-0285
Richard Batke Mortgage Broker|
* Purchase * Refinance * Renew * Debt Consolidation * * Business Equipment Leasing * Serving the South Okanagan, including: Summerland BC | Penticton BC | Naramata BC | Okanagan Falls BC Oliver BC | Osooyoos BC | Keremeos BC | Princeton BC |
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