CMHC Makes Changes
Marci • April 28, 2014
GUEST POST from www.askniki.ca
Effective May 30th, CMHC will implement a few program changes to help reduce its risk exposure. As a home buyer, how does this impact you?
Although CMHC is the largest mortgage default insurer, there are two others that mortgage brokers frequently use that currently have not altered their lending practices. These insurers are Canada Guaranty and Genworth. Here is Andy Charles’, CEO of Canada Guaranty, response to being asked if they will be making any changes:
“We are currently reviewing the announcement and potential implications…(The) overall materiality of the change is modest but indicative of an evolving market dynamic…(We have) no current plans to alter our product offering but, as indicated, are reviewing…”.
If Genworth and Canada Guaranty decide not to alter their existing guidelines, the impact on home buyers will be virtually unnoticeable (from a broker’s perspective).
The programs being changed by CMHC:
• Self-Employed without Third Party Income Validation: home buyers who are self-employed and unable to prove their income will have to use the Canada Guaranty’s or Genworth’s programs or consider putting more money down to utilize other programs offered by lenders at lower loan-to-values
For Q and A about the Discontinuation of CMHC Self-Employed Without Traditional Third Party Validation of Income, click on this link here.
• Second Home Program: this program existed for people buying recreational properties or a home away from home. They will still have access to Canada Guaranty and Genworth’s Second Home Program (until further notice), will be able to put 20 percent down or can consider alternate lenders at higher fees and premiums.
For Q & A about the Discontinuation of CMHC Second Home Product, click on this link here.
• CMHC Insuring One-Four Properties: CMHC will limit the availability of homeowner mortgage loan insurance to a maximum of one residential property (1-4 units) per borrower/co-borrower at any given time (there are exceptions, please see the link below for further details).
Their release: CMHC Notice
If you have any further questions on the program changes, or how they may impact you, please feel free to Ask Niki at niki@askniki.ca
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LET'S TALK
MARCI DEANE
MORTGAGE BROKER
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The first step is to start a conversation with me.
