2012 saw some significant mortgage changes and restrictions as rules were stiffened by our federal government to curb irresponsible real estate spending (and lending).
We saw amortization periods drop from 30 to 25 years, investment property purchases require a minimum 20% downpayment and the tightening of income requirements for those who are self-employed.
Liberty Village is a neighbourhood that attracts condo purchasers of all types: first-time buyers, foreign investors, local investors and even empty-nesters. Regardless of which category you might fit into, there are some new trends for mortgage rules that you may wish to know as you prepare for your purchase:
Financing for small condos:
Are you planning to buy a condo under 700 or 600 square feet?A lot of of the Big Banks (TD under 600 square feet and CIBC under 700 square feet) will no longer approve financing for clients wanting to put down 20% or more (conventional mortgage).For condo purchases under 600 square feet….TD Bank will charge the client the CMHC premium to buy this unit even with 20% down…..and this is the same with CIBC under 700 square feet…..other banks are starting to do the same…..We do have access to lenders that will still allow conventional financing (and the rates are also better) for those small condos….no matter how small….even less than 500 square feet.These are all Schedual A lenders….A+ lenders….with lower rates and sometime better pre-payment options. Get in touch with us for options.Condo Assignment Purchases:If you are looking to buy or sell an assignment….there are only a couple lenders left that will allow financing on the new assignment purchase price.For example….if the original purchase price was $240,000 back in 2008 and your client is buying the condo today for $340,000….pretty well all of the lenders out there today will only finance the mortgage/purchase based on the original purchase price….NOT the new purchase price.We have access to a few lenders who will still allow assignments at the new purchase price. Get in touch with us for more info.There are still options out there and we have access to some of the best mortgage brokers in the biz. Get in touch with us: Michael Camber [email protected]
