The rules seem to be that you must meet the standards for a 5 year fixed term mortgage, even though you might be getting a variable rate mortgage. Rule 2 is the maximum you can refinance your home is now 90% down from 95%, and finally you’ll need a minimum of 20% down payment for your non-primary home, to make it harder to speculate on homes.
This set of rules may be a good thing, but I am kind of torn.
The bleeding heart liberal side of me thinks this is a great idea, stopping folks from getting in over their heads and then having to give up there homes when (note I say when not if)interest rates go up 3-4% this summer. The banks tend to try to get you to buy more house than you can afford normally, but with micro interest rates, this is a very dangerous thing, so I applaud Count Floyd (Jim Flaherty) the Finance Minister for bringing in these new rules (including an actual formula for figuring out whether someone can afford a mortgage, wow, not just a heuristic that no one will follow, an actual rule).
“…there’s no place for the state in the bedrooms of the nation…”Pierre Elliot Trudeau
Yes Mr. Trudeau was talking about Homosexuality laws at the time, but whenever a government agency comes up with yet another rule to help us live happy lives, I get worried. The business side of the argument is, that with more folks able to buy houses by having easier rules for getting mortgages, the market thrives and there is real value set for properties.
I think in the end this will be a good thing, but I am curious, dear reader, what your opinion of these rules are?
Remember Lent begins today too!
Earl Jones only 11 Years?
Earl Jones received an 11 year sentence for his shady financial dealings, defrauding over $50 Million. The down side of the sentence is that he could be out of prison Autumn of next year? Wow, that does not really seem to be a fair term, if that is the case. Spend a year in prison for a $50 Million fraud, and ruin countless retirements?