Buying An Edmonton Home In June Could Mean More Than You Realize
This week we heard the news that CMHC was changing some of their requirements for obtaining an insured mortgage. What CMHC highlighted is that starting July 1st, 2020:
- Limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to our standard requirements of 35/42;
- Establish minimum credit score of 680 for at least one borrower; and
- Non-traditional sources of down payment that increase indebtedness will no longer be treated as equity for insurance purposes.
We get it, your probably wondering, what exactly does this mean to me? Simply speaking, obtaining your next Edmonton home may become more challenging after July 1st if (like many) you are looking to secure an insured mortgage.
To put even more simply, in speaking to Edmonton Mortgage Broker Dallas Sleeman, “this move will effectively reduce the purchasing capacity of buyers by about 10%”. Meaning if you were approved for $500,000 – after July 1st, you may only qualify for $450,000. She also went on to mention that those who have been struggling with managing their credit will also have a tougher time getting a mortgage as at least one borrower will need to show minimum credit score of 680. She has shared some additional information that highlights the differences at On The Mark Mortgages website.
While there are other insurance options out there for Edmonton Home Buyers including Genworth and Canada Guarantee, it is difficult to determine if they will implement similar rules as well.
So… I’m sure your wondering, is there any GOOD NEWS? Absolutely there is! What this change means is now, even more so could be the ideal time to buy. Buyers that remove the conditions on a purchase prior to July 1st will not have to meet these new criteria. As Dallas put it, “The one bright side of the equation is that we have 3-ish weeks to get active files approved under the old rules to the finish line. So if you have any clients that are actively shopping, I would get live offers in ASAP. As long as the file is approved with conditions removed prior to July 1, the deal can still close after July 1.”
The real question is: What are you waiting for? Our Edmonton real estate team and our amazing mortgage broker partners are ready to help you realize your life goals one house at a time. Simply send us a quick message and lets chat about how we can secure your next home before July 1st.
- Book An Edmonton Buyers Consult
- Book An Edmonton Home Evaluation To Find Out If It Is A Good Time To Sell
