Effective July 1st, CMHC’s underwriting policies will be changing for insured mortgages with new rules that might make it more difficult for some borrowers to buy a home. CMHC has announced they will be squeezing borrowers by reducing debt servicing limits, increasing credit scores, and restricting types of down payment sources for high ratio purchases. This will make it a little more difficult for some clients to qualify for a new home but also minimize risk in the mortgage industry during these uncertain times. CMHC foresees a 9-18% decrease in house prices the next year so they are trying to reduce risk and protect future home buyers.
“COVID-19 has exposed long-standing vulnerabilities in our financial markets, and we must act now to protect the economic futures of Canadians,” said Evan Siddall, CMHC’s President and CEO. “These actions will protect home buyers, reduce government and taxpayer risk and support the stability of housing markets while curtailing excessive demand and unsustainable house price growth.”
Following the announcement of CMHC’s new mortgage rules, Canada’s other two mortgage insurers, Genworth Canada and Canada Guaranty, announced they will not be following CMHC’s lead.
If you need some clarity or information on how this impacts you, reach out to one of our Monsters and they can help you live a monster life!