Loophole may help banks to lend to first-time buyers

Financial Post- There is a small loophole in the new federal mortgage rules that could make it easier for the banks to lend out money to first-time buyers.

The federal government announced last month new requirements for anyone borrowing money for a house and needing mortgage insurance. If you have less than a 20% down payment and are borrowing from a financial institution covered by the Bank Act, you have to take out mortgage default insurance, which ensures the banks are covered for any losses resulting from payment defaults.

For principal residences, the new rules force consumers to qualify for a loan based on being able to make payments on a five-year fixed-rate mortgage, which has a much higher interest rate than variable mortgages, now as low 1.85%…

Loophole may help banks to lend to first-time buyers

Ottawa toughens mortgage rules

Vancouver Sun- Amid warnings about "reckless" housing speculation and overextended homebuyers, Finance Minister Jim Flaherty said Tuesday the federal government would make it tougher for people to get a mortgage.

He said at a Tuesday morning media conference that Ottawa would require all borrowers meet standards for a five-year fixed-rate mortgage, even if the buyer wants a variable rate mortgage. This measure would apply to all first-time buyers. Homeowners with insured mortgages are not affected, unless they choose at a later date to extend the amortization or look to refinance.

Other rule changes unveiled would affect people looking to refinance their mortgages — lowering the maximum amount that can be withdrawn to 90% from 95% — and place a 20% minimum down payment for government-backed mortgage insurance on non-owner-occupied properties. This would affect people looking to buy condo units or duplexes for rental income. Previously, only a 5% down payment was required…

Ottawa toughens mortgage rules

Fewer first-timers entered Lower Mainland market in 2008

 Vancouver Sun, Vancouver, BC – Some 22 per cent of buyers within the territory of the Real Estate Board of Greater Vancouver, and 26 per cent in the Fraser Valley Real Estate Board territory were first-time buyers, according to the survey conducted by the polling firm Mustel Group…

Fewer first-timers entered Lower Mainland market in 2008

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