Federal Government Imposed Changes for Mortgage Qualification Take Effect

As of today, April 19th, 2010, the following changes have officially come into play in connection with the announcement made by the Federal Government earlier this year:

1. Home owners will only be able to refinance their homes up to 90% of its value. As recently as last week, homeowners were able to refinance up to 95%, but now will only be able to take out up to 90% of the equity from their homes.

2. For any mortgage term shorter than 5 years, and for variable rate mortgages, consumers will need to qualify at the greater of new Bank of Canada Posted Mortgage Interest rate or the Contract Interest Rate. Last week, for terms shorter than 5 years, borrowers were able to qualify at the Contract Rate. This change makes a tremendous difference to buyers who were on the bubble.

3. Those looking to purchase rental/investment properties will now need to put a minimum of 20% down on the purchase of rental/investment properties.

For more information about how these changes would/could effect you, call one of the qualified mortgage professionals at Alberta Mortgage @ 780-479-2222, or visit www.albertamortgagecentre.com.

More Pressure on Fixed Rate Mortgages

Just 1 week ago, the vast majority of prime mortgage lenders in Canada raised their fixed mortgage interest rates for 3-5 year closed term mortgages. It appears that rates are again set to be increased. Canada's largest bank, RBC has just issued a press release confirming that the bank will be increasing its fixed interest rates by an additional 0.25%, effective Wednesday April 14th. While it is unclear as to whether RBC's competitors will similarly increase their rates for the second time in 10 days --it is clear that financial institutions are looking to increase fixed mortgage interest rates.

If you are looking to be in the market for purchasing a home sometime within the next 3-4 months, it may be a good time to contact a mortgage broker and secure a rate hold --thus protecting yourself from further increases in rates.

For more information regarding interest rates, or to get prequalified, contact one of the qualified mortgage professionals at Alberta Mortgage @ 780-479-2222 or Apply Online @ http://www.albertamortgagecentre.com.