It is related to the purchase of a new home or refinancing, it is important for individuals to find the mortgage solution best suited to their needs.
This is the place where a professional mortgage solution provider plays a significant role. The service experts analyze specific mortgage needs along with current financial condition of clients to serve accordingly.
About new mortgage rules, professional mortgage consultants believe that the changes which are made by the government in Canada are directed to assist the individuals in various ways. The changes have been made on July, 2012.
Through this article, know what a mortgage consultant says about new mortgage rules. Check out the points below:
1. Interest is reduced for refinancing
Refinancing is actually the situation when an individual consider replacement or change of existing home mortgage with another option having different terms and conditions. The decision of refinancing is appropriate if one finds a huge difference of interest rates.
As per new rules, individuals can find refinancing more beneficial as they are required to pay 80% of the value of properties rather than 85%.
Moreover, this rule has been proving helpful in reducing the levels of debt for consumers. Along with maintaining the stability of housing market, individuals no more are required to overextend themselves financially.
Amortization period is reduced
Another benefit of new rule is that the amortization period is reduced for consumers. The rule will be beneficial for those looking for 30 year amortization period based mortgage product with having just 20 percent down payment.
In other words, the interest rate for homeowners will be reduced throughout the mortgage life. Thus, one can easily purchase homes based on specific budget.
Other than these benefits, one should also keep in mind that this rule of amortization period is not valid for consumers who have purchased a home with approved financing before July 2012.
Other changes made by the government include increase in gross debt service ratio by 39% and TDSR or total debt service rate is fixed at 44%. With these changes, it may happen that a rate hike can be noticed across many industries.
Taking into account the meaning of mortgage rules updates, professional mortgage service providers explain that refinancing, a new home purchase and debt consolidation will become simple and easier for consumers.
If you are interested to know more about the details and benefits of new mortgage rules, you can check out some popular websites explaining the same.