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Mortgage Rule Change– Year-Over-Year Comparison

Between 2006 and early 2008 marked great changes in the mortgage industry. The zero percent down mortgage was introduced and amortization options grew to include 30, 35 and 40-years. Late 2008, in an effort to stabilize consumer borrowing, the government slowly clawed back these changes to where we originally started in 2006. In essence, we have come full circle. Below is a comparison of how these changes have rolled out over the past 4 years. Using the services of an Independent Mortgage Professional will help you access a wide variety of lenders. We can guide you through the process of securing the best mortgage product at the lowest rate.

2012

  • LOC (line of credit) reduction to a maximum of 65% LTV (loan to value)
  • Stated income for BFS (business for self) programs require 35% down now (conventional mortgage)
  • Cash-back no longer accepted as down payment
  • Qualifying rates on conventional lending to now use the 5 year benchmark rate for terms of less than 5 years and VRM’s (variable rate mortgages)
  • 30 year amortization gone for high ratio mortgages, now 25 years
  • No mortgage insurance (CMHC, etc) for properties over 1 million
  • Lower maximum LTV (loan to value) for refinances. Was 85%, now 80%
  • GDS (gross debt servicing) reduced from 44% to 39%
  • Rental property down payment requirement is now 35% from 20% with many lenders

2011

  • 35 year amortization gone for high ratio mortgages, now 30 years
  • Lower maximum LTV (loan to value) for refinances. Was 90%, now 85%
  • Elimination of government insurance on LOC’s (line of credits)

2010

  • Qualifying rates on high ratio lending to now use the 5 year benchmark rate for terms of less than 5 years and VRM’s (variable rate mortgages)
  • Lower maximum LTV (loan to value) for refinances. Was 95%, now 90%
  • Rental property down payment requirement is now 20% from 5%

2008

  • Minimum downpayment changed from 0% back to 5%
  • Minimum beacon score of 620 required for high ratio lending
  • New loan documentation requirement standards
  • 45% maximum TDS ratio
  • 40 year amortization gone for high ratio mortgages, now 35 years

For more information on how these changes affect your borrowing, contact the Dreyer Mortgage Team at 604 536-3802 or Toll Free 1 800 687-9020