If you are thinking of purchasing a home in 2011 you need to take some crucial steps to make qualifying easier for you and ensure that you get an excellent interest rate. IT WILL BE EASIER TO QUALIFY IN THE FIRST 3 MONTHS OF 2011.

1. GET A RATE HOLD THROUGH A LICENSED MORTGAGE BROKER


**Very important first step, this will lock in an interest rate for you lasting 120 days. This means if interest rates increase during this rate hold period (which is expected to take place), your rate will stay at the lower amount you locked in. Using a mortgage broker instead of a bank also provides you with a greater number of lending options. Getting a rate hold also COSTS YOU NOTHING!

2. GET AN IDEA OF WHATS OUT THERE


- Now is an excellent time for prospective buyers in Calgary, especially first time buyers. There is a high amount of inventory on the market, so start seeing what is available to you.

**If you want to take advantage of the extra 5 year amortization (35 years) before the rules change (March 18, 2011) and make qualifying easier for yourself, then look to placing an offer on a home before this date**

3. ACT AS QUICKLY AS YOU CAN


- This applies especially to getting a rate hold, once this is complete you will have some time (before March) to search for your perfect place. In real estate it is never wise to rush into a purchasing decision, that's why it is very important to start the process early so you can make informed decisions along the way


If you have any questions regarding the new mortgage rules or about purchasing a condo or single family home, feel free to contact me at 403 554 7779 or by email asheton@calgaryrealtyteam.com. and
GOOD LUCK!
Asheton Coultman
Realtor
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What do the new mortgage rule changes mean to homeowners and potential homeowners in Canada, and more specifically Calgary. First off it is important to understand what exactly has changed and how these changes will effect you. Here are the recent changes

1. LIMITED THE MAXIMUM AMORTIZATION PERIOD DOWN TO 30 YEARS

- This change is fairly straight forward, 5 years less to pay off the mortgage on your home (down from 35 years). Although this means less interest paid to the bank over the duration of your mortgage, it also means people looking to purchase will have tighter qualification requirements along with a slightly higher paymet.

2. LOWERED THE MAXIMUM REFINANCING AMOUNT TO 85% OF THE LOAN TO VALUE (DOWN FROM 90%)


- This change along with the reduction in amortization encourages homeowners to keep more equity in their homes, those refinancing will have to leave an additional 5% of the value in the form of equity in their home. To keep it simple, homeowners will not be able to pull as much equity out of their home when they refinance.

3. WITHDRAWEL OF GOVERNMENT BACKED NON AMORTIZING LINES OF CREDIT SECURED BY HOMES

- In the past these lines of credit are non-amortizing, meaning that the borrowers are not required to make regular payments on the principal amount of the loan. In addition these loans are almost exclusively variable rate products, which expose borrowers to the impact of rising interest rates. Many lenders now offer multiple loans or a multi-segment loan secured against a borrower’s home. If a loan or a segment of a multi-segment loan is in the form of a revolving line of credit that does not
amortize over time, it will no longer be eligible for government-backed insurance. However, with established scheduled principal and interest payments, a loan will continue to be eligible for government backed
insurance, provided it meets the underwriting standards set by the mortgage insurer. Withdrawing government insurance backing on these non-amortizing products is consistent with the Government’s objective of supporting the long-term stability of Canada’s housing market.



The adjustments to the maximum amortization period and the maximum refinancing amount will come
into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured
by homes will come into force on April 18, 2011.


For more thorough information on the changes, visit the Department of Finance Canada website at:
www.fin.gc.ca



If you are thinking of purchasing in the next few months and want to take advantage before these rules come into effect, follow this link for the FIRST STEPS YOUR SHOULD TAKE. http://www.calgaryrealtyteam.com/Blog.php/buying-in-2011-what-to-do-before-mortgage-rules-change-in-calgary
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