Let’s Try This Again
Okay, so a month ago canadian mortgage laws were announced to be changed in a very drastic way. We even wrote a post about it –> http://www.realestateaccountingsoftware.ca/industry-news/buyers-beware/. Read it. You know you want to. Anyhow…when we originally wrote this post we did so in the form of a warning, with even the title being Buyers Beware. However, our warning, nor any other warnings, seem to be reaching the public on a large enough scale, which is a concerning notion.
The impending changes were announced June 20th, and when a survey took place between June 29th and July 4th, it unveiled that only 45% of Canadians are aware of the changes taking place. Not even half the country’s aware, which is quite upsetting…maybe the government needs to give our marketing guys a call to help get the word out when things this important happen. You’d think that there would be bigger efforts put forth to see that these changes were broadly understood…but apparently not.
To give you guys a re-cap, on July 9th, the maximum amortization length has been shortened from a 30 year maximum, to a 25 year maximum, with lenders also being limited to only providing home equity loans that cover 80% of the home’s value, as opposed to 85%. These little increments of 5 are a lot scarier than you’d think, especially for new home buyers, who are (those who know about these changes anyways) in relative awe at how much these changes will affect them. Not only do new buyers have to come up with an extra 5% for their down payment – which, if you were looking at purchasing a $500,000 home, your down payment down payment amount just increased from $75,000 to $100,000., and there’s absolutely nothing you can do about it – but they also need to pay back this amount 5 years faster than before. The whole situation’s frankly sticky, especially since the government’s reason for doing this is to attempt home ownerships from being drawn out and to aid citizens in achieving their long-term goals…which is seemingly ironic, considering that these new laws will inhibit people from even beginning to reach their long term goals.
Feel free to share this article with fellow Canadians to ensure that the word is out about these changes to that buyers can be prepared. If you have any other comments we’d love to hear them, so join the conversation with us on Twitter.
