Department of Finance New Mortgage Rules
Mortgage Rules
As some of you may have heard, the
Department of Finance announced changes in how lenders finance mortgages.
Although the rules are meant to affect “high-ratio” insured mortgages (less
than 20% down payment), some lenders have spread these rules to ALL of their
mortgage lending; whether high-ratio or not.
Here are some highlights of the changes:
- Maximum
amortization reduced to 35 years
- Minimum down
payment = 5%
- New credit score
floor of 620
- Minimum loan
documentation standards
- Maximum 45% TDS
(total debt service ratio)
- No high-ratio
mortgages with interest-only payments
These
changes take effect October 15th; however, some lenders have
initiated the changes immediately. We still have lenders who will
continue to offer the 0% down & 40-yr amortization program for clients
obtaining mortgages before the October 15th deadline.
RESIDENTIAL MORTGAGE RATES
EFFECTIVE: September 11, 2008
Prime Rate = 4.75%
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