It is extremely important for home buyers specially the first time buyers to know what they are dealing with before they sign those papers. If you are a newbie to the mortgage market then worry not, you are not alone in your confusion.
Toronto, Ontario (PRWEB) August 12, 2012
Marcus Arkan, experienced mortgage expert and CEO of Canada’s premiere mortgage brokerage SMI has recently shared an analysis of new a mortgage policy. In his analysis, Mr. Arkan shed light not only over the effects but also on the possible reasons that prompted Mr. Jim Flaherty to change the rules for the fourth time in a row.
In this aspect, a new BMO study also unveiled what Mr. Arkan has suspected for a long time, nearly half of Canadian citizens don’t understand the new mortgage rules and how they are affected by them.
According to Mr. Arkan, “It is extremely important for home buyers specially the first time buyers to know what they are dealing with before they sign those papers. If you are a newbie to the mortgage market then worry not, you are not alone in your confusion.”
Under the new rule, the highest amortization is minimized to 25 years from 30 years. As calculated by SMI experts and analysts, this might potentially augment mortgage payments by nearly 12 percent on average. Additionally, it is also planned that by October, federally regulated banks will bring home equity credit down to 65 percent. Banks will be obligated to qualify all terms at the Bank of Canada five-year standard rate (usually RBC's five-year posted rate).
According to Mr. Arkan, first time buyers will definitely feel the pinch. However, Self-employed borrowers who write off a lot of their earnings and of course the existing home owners with an
amortization longer than 30 years, less than 20 percent equity in their property and would like to look for a better mortgage rate, might also be badly affected.
Mr. Arkan further suggested that the new policy, although an untimely move to cool down Canada’s housing market, might actually have some positive aspects as well. “The silver lining is that mortgage rates are extremely low and with many lenders offering close to 3% for five-year fixed terms. Their rates may be even lower for shorter terms. For the first-timers, it just might be cheaper to own than to rent. There is still hope for them as it is only $478 a month per $100,000 borrowed for their mortgage payments.”
However, in conclusion to these revelations and analysis, Mr. Arkan urged borrowers to learn more about the options and possibilities available to them under the new rules.
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.