The following rules will
apply to purchasers and home owners requiring hi-ratio financing [less
than 20% down payment / equity].
The Federal Government
announced this morning four new clampdowns on insured mortgages effective
Monday, July 9th, 2012.
These changes include:
- Reducing the maximum amortization period to 25 years
from 30 years
- Reducing the maximum amount of equity homeowners can
take out of their homes when refinancing to 80% from the current 85%
- Limiting the availability of government-backed
mortgages to homes with a purchase price of less than $1 million
- Fixing the maximum gross debt service ratio at 39% and
the maximum total debt service ratio at 44%
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