(PRWEB) October 23, 2012
A debt burden has been piling up on the real estate market of Canada for many years due to extremely low interest rates offered on housing loans. The after effects of the debt burden slowly started becoming visible in the form of another real estate bubble. This called for some serious decisions to be made by the government to cool down the hot housing market.
The new mortgage rules reduced the amortization period on government insured real estate properties from 30 years to 25 years. They also decreased the maximum amount of debt a person could borrow to invest in real estate.
Even though, the housing market did cool after the implementation of the new rules, the residents feel that their problems have increased. After the global economic downturn in 2008, many people who had lost their jobs were on their way to regain their financial status. But these mortgage rules have hindered their progress.
Stricter mortgage policies have made it difficult for them to invest in real estate. Even though house prices are said to have dropped by 3 percent but higher mortgage rates and reduced amortization periods are taking a toll on potential buyers.
According to the government of Canada, up to 5 percent of potential home buyers will not qualify for a mortgage now, after the implementation of the new mortgage rules. “With stricter policies, people are now hesitant to purchase homes as they fear their disability to meet the new mortgage requirements,” Mr. Arkan said. He further added that, “More people are now forced to lease homes rather than purchase them”.
James Brown, a resident in Toronto, said, “After losing my job in 2008, I was living in a rented home. Now that I had regained my financial stature and was ready to invest in property of my own, these new mortgage rules were enforced. The new rules have made it impossible for me to refinance as the maximum limit on refinancing has been reduced from 85 percent to 80 percent. Unable to afford the high monthly payments, I plan to live on rent for a few more years until the situation of the real estate market improves.”
To know more about the current mortgage rates being offered, visit the Syndicate Mortgages website.
About Syndicate Mortgages Inc.
Syndicate Mortgages Inc. is one of the leading Canadian mortgage brokerage firms. Founded in 2008 in Ontario, the company specializes in residential, commercial and construction financing across Canada. With years of experience and expertise in the mortgage industry, and access to an array of lending institutions across Canada, Syndicate is known for finding the best mortgage rates for their customers. Syndicate has branch locations across Canada. For contact, please use the following details.