Christine Buemann Mortgage Broker

When you are putting less than 20% down in Canada, your mortgage has to be insured through CMHC , Genworth or Canada Guaranty . They provide lenders with default insurance in case borrowers default on their mortgage. Traditionally, if you were putting more than 20% down, you were able to avoid this cost as it was covered by the lender if required. The Government has implemented many rule changes which directly impact lender’s ability to rely on default insurance for conventional mortgages. Most lenders have now started classifying 2 categories: “insurable” and “uninsurable”. While they are still able to provide uninsurable products, most of those options now come with a higher rate attached. Here are a few examples of mortgage which can no longer be insured: Rental properties Refinances Amortizations longer than 25 years Applications that do not qualify using the Bank of Canada’s rate Properties over $1M Applicants with credit scores under 600 Here are CM...

  If you are putting less than 20% as your down payment in Canada, your mortgage must be "insured". This type of insurance is called default insurance and protects the lender should you default on your mortgage. It is percentage based and is generally added directly into your mortgage total. Most Canadians have heard of CMHC, however did you know there are now two more alternatives for default insurance in Canada? Over the past few years, Genworth and Canada Guaranty have emerged as healthy competitors. All three have very similar guidelines such as: ·          minimum credit scores ·          minimum debt ratios ·          minimum loan to value ratios ·          down payment source options ·          supporting document requirements There are however district diff...

There can be a lot of confusion around the different types of insurance when purchasing home. Here is a quick overview:   Default insurance: This is provided through CMHC, Genworth or Canada Guaranty. It is required for purchases with less than 20% for down payment. It is a percentage based on several variables but mainly your down payment amount, down payment source and amortization. It is generally just added into your mortgage at origination.   Home insurance: Otherwise known as Homeowner’s insurance. It is a type of property insurance that combines various personal insurance protections, which can include losses occurring to one's home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory. It is required for anyone who is obtaining a mortgage.   Life ...

The Bank of Canada announced new changes to come to Canadian mortgage guidelines this morning. This is the fourth tightening of guidelines in the past 4 years. They have clearly stated that the intention of their continual clamping down of qualifying criteria is an attempt to cool down the housing market and reduce household debt in Canada. I was pleased to hear that the 5% down payment rule would remain; however it is yet to be determined how these new rules will affect home owners. They will take effect on July 9th and I believe that they have implemented such a short time frame in order to eliminate the surge of people rushing into home purchases that was experienced with the last announcement of changes. Here are the new changes: • Maximum amortizations will be reduced from 30 years to 25 years • Maximum refinances will be reduced from 85% to 80% • Maximum GDS and TDS are set at 39% and 44% • Properties purchased at over $1 million will no longer be eligible for mortgage ins...

When the new federal budget came in about a month ago we discussed two things: 1. The first being that the governance of CMHC was being moved from the human resources department to the Office of the Superintendant of Financial Institutions (OSFI). Essentially control of CHMC was being moved so that the financial department could have direct audit and control of its policies and programs. 2. Due to CMHC increasing its portfolio insurance holdings (insuring mortgages for banks at less than 80% loan to value), the media created uninformed and overblown fears about the amount of mortgages insured by CMHC. CMHC is nearing its limit of total amount of mortgages it is permitted to insure, forcing lenders to expand their insurance relationships with Genworth and Canada Guaranty. The speculation was that the government, due to CMHC's low portfolio loan to value would increase its insurance limit. So, the news: It looks like Jim Flaherty is moving quickly to sink his claws into CMHC...