What The New Mortgage Rules Really Mean

[REINteam]

With Jim Flaherty's announcement of changes to our nation's mortgage rules, a lot of differing views are popping up in the media. Don Campbell's latest blog post tackles the issue and gives you a perspective on who will be affected and what the intended and uninteded consequences of the changes will be.



READ THE BLOG HERE: http://www.donrcampbell.com/what-the-new-mortgage-rules-really-mean



What are your thoughts?

 

[Charon]

I believe the government is trying to control reckless investors from investing in real estate, which can be very damaging to not only the people themselves, but to the real estate market. It also provides a safety buffer for people who are less experienced in real estate, and prevents them from getting too much in trouble with the financing aspects of real estate.

 

[Thomas Beyer]

[quote user=Charon]I believe the government is trying to control reckless investors from investing in real estate,I think you are referring to the changes introduced about a year ago, namely that investors have to have 20% down, and as such do not usually use CMHC.



The changes introduced this week have minimal impact on investors, in fact help them as they will find more deals AND more renters !!

 

[mortgageman]

This will help investors as it takes out some first time homebuyers who would otherwise need a 30 amortization to qualify. The issue I have with the new rules is that the maximum loan-to-value on a refinance has been reduced to 80 LTV. This traps people in high interest debt that they could otherwise consolidate to lower their costs and improve their cash flow. I think 90 LTV was an appropriate figure for refinances.