CMHC made significant changes to their mortgage insurance rules yesterday.
Reasons cited are business closures, job losses and notably, loss of immigration all due to the Covid-19 pandemic.
Changes include acceptable credit scores of 600 have been raised to 680
Gross debt ratio of 35% which would be your mortgage, interest, taxes and heat divided by your gross annual income and Total debt ratio of 42% - all your debt divided by your gross annual income.
Another change is the source of your down payment must not increase your debt, loans, lines of credit or family gifts that need to be paid back are no longer allowed.
CMHC is also predicting a fall in home prices by 9-18%. We are certainly not seeing that in Brant. With low inventory as we have seen for the past many years, average price for a detached home in Brant had increased just over by 10% compared to May 2019.
One of the strategies buyers are taking is to move to communities with lower prices. We do see a considerable number of people leaving the GTA and even the KW area to select Brant and the South to West area, including Haldimand Norfolk and Oxford.
Other changes include suspending refinancing on multi-family properties with the exception of funds for repairs or to reinvest into housing.
The changes are protective measures in anticipation of a significant price adjustment should housing prices drop drastically.
For the full report visit:
https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2020/cmhc-reviews-underwriting-criteria
Considering the changes in the CMHC Rules, is now a good time to buy and sell Real Estate?
THE BOTTOM LINE…
Yes, if you are in a good financial position to buy a home it is definitely a good time. Prices in Brant area are trending upward. Brant offers a great location and affordable pricing vs the above mentioned areas. Beat out other buyers and get our 10 Best buys list along with access to our exclusive off market properties here.
Whether you are buying for personal use or investment purposes, you can buy now and benefit from increasing prices on the short term.
For sellers, if you have a good saleable house, now is a great time to sell. There are lots of ways to increase the value of your home and gain equity in a new home. For a limited time we will mail to you free of charge, our free Home Sellers Kit which includes our two most popular special reports, 27 Tips to Drive Up the Sale Price of Your Home and 11 Critical Tips to Pass Your Home Inspection. As a bonus we will also include what homes are currently selling for in your neighbourhood. This information will help you determine if now is a good time for you to sell your home, or if it would be best for you to wait.
We would like to hear from you! If you have any questions, please do not hesitate to contact us. We are always looking forward to hearing from you! We will do our best to reply to you within 24 hours !