Saving for your down payment has just become a bit more difficult. With todays announcement from the Federal Government, it could make it a bit trickier to get into your first home.
The Federal Government has handed down new down payment rules Finance Minister Bill Morneau announced on December 11th there is a policy change regarding the new minimum down payment requirement, which will take effect on February 15, 2016.
You can read more details on the Canadian Mortgage Trends Website at CanadianMortgagetrends.com or click on the link for the article.
Here is a small sample of the article regarding how the changes affect the amount required and at what threshold the changes will affect the most.
For properties between $500,000 and $1 million, folks getting an insured mortgage will now need to put more down—up to an additional 2.5% of the purchase price. In other words, 5% down will be required on the first $500,000, and 10% down will be required on the next $500,000.
For a $750,000 property, that means you’d have to cough up a 33% bigger down payment (compared to today), or another $12,500. The new rule doesn’t affect properties over $1 million because they don’t qualify for high-ratio mortgage insurance anyway.
As always its good to have a team of professionals on your side when considering buying your first home or moving up in the market. With so many industry changes and hidden fees added to many processes in recent years, it is more important than ever to have the right people helping you avoid some of the hidden pitfalls. Make sure you have a well informed Mortgage Professional, Real Estate Agent and Residential Real Estate Lawyer on your side.
SCOTT ROY Sales Representative
RE/MAX JAZZ Inc. Brokerage – 21 Drew Street, Oshawa, ON
(905) 728-1600 Office or (905) 435-7355 Direct / Text