Some may be thinking that now may be the ideal time to buy that house that they were thinking about. Thinking this way is based on the low mortgage rates. However, for others there are big concerns about the instability of the economy. The opinion of the near future is split.
Its Going To Get Better
There are many who believe the financial turmoil that is now taking place is going to get better. They are counting on this as different parts of the country are opening up cautiously. The financial support that the government provided helped many to get through what could have been an even worse time. Although the majority of Canadians will be playing financial catch up on some level. Those that are more confident about things getting better are those that have confidence in knowing that their jobs are still waiting for them.
Its Going To Get Worse
The other group are those that found it extremely difficult to get through the last few months even with the government financial assistance. Many had to defer payments on their bills, but now as the threat of the virus reduces these individuals are going to have to make up for payments not made. Some may be required to make small payments on bills that are overdue. Others will find that their debt obligations are deferred which extends the length of time needed to pay out the bills. Then the real fear for some is that their jobs will no longer exist.
Buying A House
For those who are in a financial position to think about buying a house, they need to be aware of some new rules coming into play regarding CMHC. This will have a direct effect on morgages
What is CMHC?
This stands for the Canadian Mortgage and Housing Corporation. It has been in existence since 1944. It is used by home buyers as a form of mortgage insurance. It is mandatory if a homebuyer is putting less than a 20% down payment on a home. The cost for this insurance is applied to the mortgage payments. This has been a valuable resource for those who have not been able to save enough to reach the 20% threshold for a down payment.
Big Changes Coming
CMHC has chosen what may seem as an inopportune time to change some of their rules regarding their debt-ratio policy. This will affect the affordability of a home buyer based on the CMHC ratio. The biggest impact this is going to have on home buyers is where they get their money from for their down payment. The new rules will come into effect as of July 1, 2020.
Homebuyers will have to raise the money from their own resources. Such as from savings or as a gift from a relative along with a few other resources. Anyone that is thinking of buying a home should research the new rules carefully to see what they will need to do to comply with them.
If you have another pressing matter like your taxes that need to be taken care I would be happy to assist you. Please contact me if this is the case.
