40 year~0 down still available!!! HURRY!

On July 9, the Department of Finance announced adjustments to the rules for government guaranteed mortgages aimed at protecting the strengthening the Canadian housing market. CMHC supports the new parameters and the government’s ongoing efforts to maintain a strong Canadian housing market.Consistent with the government’s direction, CMHC will no longer be accepting mortgage insurance applications for 40-year amortizations or 100 per cent loan-to-value mortgages on or after October 15, 2008. Those mortgages with a 40-year amortization and the 100 per cent loan-to-value mortgages already insured by CMHC are not affected. CMHC mortgage insurance coverage on these mortgages is good for the entire life of the mortgage. Other mortgage insurers including Genworth and AIG will follow suit.However, CMHC and other mortgage insurers will continue to offer mortgage loan insurance for amortizations of up to 35 years and up to 95 per cent of the value of the property, and will continue to offer a wide range of innovative products that meet the needs of borrowers. Another program that will allow purchasers to buy a home with zero down is called Flex Down. This program allows purchasers to put 5% down from borrowed funds from a personal line of credit or a loan from family or lender cash back incentives from the Mortgage Lender or Bank. This option works well and actually is better than zero down as the mortgage amount is reduced by 5% and at renewal time, the loan can be placed into a regular mortgage at prime rates, based on qualifying.What this all means to individuals and families that are looking at buying or refinancing their homes in the next few months need to get organized now. Although most lenders are already reacting to the Government’s announcement, there are still lenders that are offering 40 year amortizations and zero down mortgages. This can be retracted at anytime by the lenders, but as of the date of this publication, they are still available.The guidelines are that the application for the mortgage along with the offer to purchase is submitted to the lender by the Bank or Mortgage Specialist on or before October 14, 2008. If you are already pre-qualified with your Lender or Bank, your offer should be put in with the MLS listing and Offer to Purchase with your Realtor as soon as you have completed the agreement with the Seller.Clients that have already qualified and have mortgages in place with 40 year amortizations need not worry. If you have already qualified and your mortgage is in repayment, you are not affected by the reduction in amortizations from 40 to 35 years. Once you mortgage renews in say 3 years from now, your mortgage company or your Mortgage Specialist can shop the market for your renewal and rate. The mortgage from that point on would be calculated on 37 years left to repay at the renewal mortgage interest rates. Should you wish to refinance your mortgage now on a high-ratio basis over 80% of the value of your home, you will be capped at a maximum of 35 years to repay.With any questions regarding your mortgage, please feel free to contact Kevin MacGregor with Home Loans Canada 403-852-2908 to see what options are available to you on renewal of your current mortgage or to use your home equity for improving your current home or investment.