Big Changes Coming To Qualifying For An Insured Mortgage July 1st, 2020:
Dane Kingsbury, Macdonald realty and we have just learned that CMHC is making some pretty significant changes to insured mortgage financing (an insured mortgage is when you have less than 20% for down payment/or equity):
#1 they are Reducing the debt servicing ratios from (Gross Debt Service/Total Debt Service). What my sources tell me This means is that that you’ll qualify for approximately 12% less than you do today. For example, assume you make $70K and currently qualify for a $350K mortgage, you’ll now only qualify for a $308K.
They are also Increasing the minimum beacon score from 600 to 680. The Beacon score is a three-digit credit score that varies according to the information in your credit report. A score of 760 or higher is considered excellent., while a number between 700 and 759 is very good. A number below 560 is deemed weak.
Lastly, for now, they are Eliminating the ability to borrow your down payment.
These are significant changes to qualifying. As such, if you’re looking to get into the market and have less than 20% down payment, there’s no time like the present.
In closing, As of now, our sources also indicate that the other two insurers (Canada Guarantee and Genworth) will not be following suit, but time will tell… If you have any questions or need any mortgage connection recommendations just let me know.
Have a great day!