Ottawa, Canada (PRWEB) December 12, 2012
The Office of the Superintendent of Financial Institutions is about to lay out certain standards for the three mortgage insurers of Canada which it expects them to follow while underwriting fresh policies, says Tara Perkins, a real estate reporter of The Globe and Mail. OSFI has recently been assigned the duty of administering and supervising Canada Mortgage and Housing Corporation (CMHC).
Mortgage insurance is a way of offering coverage to the lender as well as the borrower in times of crisis, when the borrower is unable to make his/her payments. These are beneficial for both the parties and give them financial security. In Canada, mortgage insurance is compulsory for borrowers who make a down payment of less than 20% of the purchase price.
According to mortgage expert and CTO of Syndicate Mortgages, Marcus Arkan, “Any policy changes in the mortgage sector will have an adverse effect on the real estate market. This is because a segment of potential home buyers will get disqualified from the criteria necessary for purchasing a house on mortgage. The lack of demand will drive down real estate prices hence, affecting the housing market.”
Julie Dickson, superintendent to the regulator, believes that even though the real estate market will experience an impact of new guidelines regarding mortgage insurance, the impact will not be as great as compared to the implementation of the bank’s guidelines. Nevertheless, some potential buyers may delay their home buying plans for a later date.
The guidelines will essentially focus on the steps that mortgage insurers should take to prevent taking too much risk while insuring mortgages of home owners. According to Ms. Dickson, the housing market in Canada is continuously growing along with an increase in the household debt. Therefore, such measures need to be taken to prevent the looming debt burden on the economy and to remind creditors of their duties towards their lenders.
Mr. Arkan expects these guidelines to further regulate the housing market and decrease default risk on the part of borrowers. Moreover, careful consideration by mortgage insurers will reduce the amount of risk they take when insuring mortgages of homebuyers. These will certainly be beneficial for the economy in the long run.
To know more about the current mortgages 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.
Syndicate Mortgages Inc.
Toll Free: (888) 646-1062