In previous postings, I outlined the recent changes implemented by the Federal Government regarding the rules for government-backed insured mortgages. The changes became effective July 9, 2012. The government brought in these changes because, they are very concerned with the amount of debt that Canadians are carrying. In this posting, I would like to provide insight into what some of the changes mean, and how they will affect you and other Canadians.
Under the new rules, the maximum amount a Canadian family can borrow when they refinance their house will be reduced from 85% of the value to 80%. This will effectively reduce the funds that are available through home equity lines of credit. What kind of impact will that have on us all? It will mean that Canadians will no longer be able to use their house equity as a way to pay off unsecured debt (something many Canadians have become all-too-comfortable doing over the past decade). It also means that homeowners are going to need to get their financing and budgeting in order quickly. As homeowners, we will no longer be able to rely on the “bank of house equity” to dig ourselves out of a tough spot whenever we hit the financial skids.
At A. Farber & Partners, we provide a free, no obligation review of your financial situation, so that we can develop a customized debt relief plan to help people manage their cash flow. Get in touch with us today at (844) 507-7526, so we can discuss your options with you at your free no-obligation consultation. We have 50+ offices to serve you.
Other mortgage debt-related articles:
- How the new Canadian mortgage rules are going to impact us – part 1 of 4
- How the new Canadian mortgage rules are going to impact us – part 2 of 4
- How the new Canadian mortgage rules are going to impact us – part 4 of 4