| OTTAWA has made it tougher for people to get | | | | of the real causes of out of control real estate |
| mortgages. Here are some of the changes that | | | | prices is the huge commissions made every time |
| will affect home buyers when applying for a | | | | someone buys or sells a home. |
| mortgage in Ottawa or any place else in the | | | | I have to be honest, there is a positive to all this. |
| country. The rules took affect in April of 2010. | | | | Here it is. Like most people everyone wants to |
| 1. Ottawa is going to require that borrowers meet | | | | own their own home and that's a good thing. The |
| the standards set for a five-year fixed-rate | | | | problem with super low interest rates is that they |
| mortgage, even if the buyer wants a variable | | | | don't last and when mortgage rates go up, so do |
| rate mortgage. This applies to all first-time buyers. | | | | your monthly mortgage payments. If your |
| If you are a homeowner with an insured | | | | mortgage is at 3% you are paying $1,000 |
| mortgage are you are not affected, unless they | | | | monthly and the rates go up to 4.5% - now your |
| choose at a later date to extend the amortization | | | | mortgage payment is $1400 and you could find |
| or look to refinance. | | | | yourself in a real bind. There is nothing to say that |
| 2. If you want to refinance your mortgage to pull | | | | the rates may go to 8,10 or 12% or higher. I can |
| out equity the maximum amount that can be | | | | remember when the mortgage rates in Ottawa |
| withdrawn to 90% from 95%. | | | | were as high as 18%. |
| 3. If you are buying an investment property and | | | | So the positive thing is it is sort of protecting |
| you are seeking a government backed mortgage | | | | people from themselves. If you are allowed to |
| then you will need at least 20% down. This has | | | | just squeeze into a 95% mortgage placing |
| changed from only 5% down. | | | | yourself in a dangerous position financially and the |
| Mr. Flaherty said "There's no clear evidence of a | | | | rates go up, you are going to be in trouble. |
| housing bubble, but we're taking proactive, | | | | In conclusion, we think the changes that were |
| prudent and cautious steps today to help prevent | | | | made were for the better. We need only to look |
| one," Thanks a lot! He says it will stabilize the | | | | at what happened in the sub prime lending frenzy |
| housing market and that doing so is a good thing. | | | | to see why Ottawa stepped in to protect people |
| The only problem I see with this is it shuts the | | | | from themselves and the economy from disaster. |
| door to home ownership to a lot of people. One | | | | |
