All About Real Estate, Finance & Mortgages

• 100% financing (5% will now be the minimum down payment on an insured mortgage) • 40 year amortizations (35 years will be the new maximum on insured mortgages) The government will also require the following with all new mortgages it insures: • A new 620 minimum credit score requirement • New loan documentation standards The new rules will take effect October 15, 2008. This affects CMHC insured mortgages as well as mortgages insured by Genworth, AIG, etc. Insured mortgages are generally those with less than 20% down. Certain conventional mortgages are also insured, however, in a statement from the Department of Finance said, "Today’s announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada. "These new rules pertain only to new, government-backed insured mortgages. This will not affect existing mortgages."

Housing starts were up for January to a seasonally adjusted annual rate of 222,700 units, compared to 184,700 units in December, according to Canada Mortgage and Housing Corporation figures released Friday. A seasonally adjusted annual rate measures monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels. "Historically low mortgage rates, solid employment and income growth as well as a high level of consumer confidence continue to underpin the high level of housing starts," chief economist Bob Dugan said in a news release. "Housing starts in January returned to a level more consistent with our expectation that housing starts will total 211,700 units in 2008, remaining above the 200,000 mark for the seventh consecutive year." Continue Article