Government of Canada has announced changes to mortgage rules, the most important one is maximum amortization on any high ratio mortgage will 25 years only.
So 25 years amortization will help everyone including First time home buyers. How ? Here is the explanation, which is merely my own ideology.
So I was discussing with my current clients who are in the market to buy their first dream home in Canada.
In my opinion government made a good decision. There are certain reasons....
1) Lower mortgage rates are going to stay here longer than we expect.
2) Some people were borrowing more than they can afford, just because of lower mortgage rate.
3) Due to lower mortgage rate in my opinion market is artificially inflated, especially in the month of Feb - May 2012, so this market wasn't helping the first time home buyers and eventually it would have crashed like what happened with the USA back in 2008.
So 25 years amortization will help everyone including First time home buyers. How ? Here is the explanation, which is merely my own ideology.
From July 9 2012 onward the maximum amortization for high ratio mortgage will be 25 years only. It is true that it will make mortgage qualification difficult for so many hopeful home buyers, however this will make real estate market more balance and adjust it. And it will be win win situation for all seller and buyer both, because 25 year amortization will protect market from crashing.
After reading above home sellers must think what about me ? don't worry I am sure the market is not going to correct, it is going to be balance.
Please give me a call to understand different type of real estate market.
Best regards,
Ritesh Joshi
Your Next Door Realtor
Your Next Door Realtor
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