Who Moved The Cheese? July 10, 2012

Well, this blog almost stated at 4am.. but thank goodness, I shut my notebook down, and cuddled under the covers with my boy. Meaning my 3 year old puppy of course. Because by 4:30am, my other boy is already out and on his way to work.  Which leads me to believe I’ve got a pretty good life. And this real estate thing “ain’t” so bad .

It’s now 8:30 am, and I have been doing some research on the new mortgage rules. My hubby…well, he’s been working on a hot tar roof since 5am. Which leads me to believe I’ve got a pretty good life. And this real estate thing “aint” so bad.

Yes, you’re right.. I did repeat myself.. it’s just for my own benefit..  sometimes I need to remind myself more than once.

I am sure there are rumblings in every real estate and every mortgage brokers office right now, and mine is no exception. Maybe the rumblings already started at your house. Who Moved my Cheese is a great book.  Well, guess what? Someone just moved the cheese. And you might not have even known it.

The following topic might be a bit boring to some, but it is important information, and you will have wished you had read it. So read it now, and you will save yourself some surprises in the future!

The New Mortgage Rules went into effect on Monday, but did so very quietly. I’ve been told that many Canadians aren’t even aware of the changes. They are big changes, and will change your buying and lending power. So be aware of them, or you will be disappointed at buying time. Or at refinancing time. Or for some, at vacation time.

The goal of this is to cool the housing market, to cool down the increase of appreciation and to avoid a future real estate crash. To avoid repeating the unfortunate housing disaster in the States.

The Big Changes?

#1… A 35 year mortgage is no longer existent.. the max is now the traditional 25 years. What’s that mean to you? The length to pay off your home loan has been shortened by 5 years.. Ouch!

#2… Refinancing your home?  This is being capped at 80% rather than the usual 85%. Double Ouch!

#3… Previously you were allowed to borrow up to 80% of your home equity.. that has now been reduced to 65%. Triple Ouch!

#4… I also hear that cash backs will be non-existent in a few months. Well, that will be certain to cool things off for you first time buyers.

Although I’m not super thrilled with these changes, I see them as being responsible changes. And again, although I don’t like them, I think they are needed. A protection, hopefully, against a real estate crash. Which would be devastating to Canada.

All this great information is sourced from one of my go-to gals, an incredible Mortgage Broker Angela Vidakovic. If you require any other information, feel free to get in touch with her or I. Either of us can help answer any questions.

Well, that’s my informative blog of the week. Next time, it will be juicer. Promise J