A quick update for anyone who missed the announcement. The Government of Canada has passed Bill C37 which changes the minimum loan to value amounts for conventional mortgages.
What does this mean to you? In the past if you were borrowing more than 75% of the purchase price, or value of the property, you had to get CMHC or Genworth mortgage insurance. Now that Loan to Value amount has changed so that there is no need for high ratio mortgage insurance if you are borrowing less than 80% of the homes value. This move will save you a large chunk of change (over a thousand dollars) if you can come up with a 20% downpayment. For those that had been saving up to have a 25% downpayment and avoid the insurance premium, you can now put 20% down on a larger or better home, or spend the extra 5% on furniture, upgrades or savings.
Sunday, May 27, 2007
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1 comments:
Australia has mortgage insurance as well. However it is 10% which is a bit better.
Often though banks will let you put the $3000 of mortgage insurance on top of your loan so really it is not that big a deal.
The way I see it is the time spent saving up to the 10% or in your case 20% the property prices have often risen by say $10 000 in that time.
Also in the time you were saving up you could have used that time by going to auctions or signing contracts with a few wild offers that if you win you could have saved well over what the mortgage insurance would have been anyway.
I guess what I am trying to say is that it is often a false economy worrying about it.
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