Everybody wishes to buy a house of his own at least once in a lifetime where he could fulfill all his dreams and live happily with his family. But everybody is not so lucky that he could enjoy his small heaven as it requires huge investment. Most of the time it is more than his life time savings. To help you achieve your dream, state governments provides you with various mortgage schemes.
Every country has different real estate rules and norms. Similarly Canadian government has its own. Recently this government has come up with Canada’s new real estate rules for home buyers. Recession in the recent years has impacted economic status of the Canadians badly. This has made it difficult for them to save enough money to repay their mortgages in time. To curb the mortgage defaulting Canadian government has resorted to these new real estate rules. Finance minister Flaherty has declared that government will not support loans having amortization period more than 30 years which earlier was 35 years. One of the important steps taken by new government was to support insured mortgages with loan to value ratio of over 80 percent.
Due to increasing interest rates in the mortgage period people failed to repay their loans. Now these new rules will enable them to pay their debts timely with less interest. Besides these, maximum borrowings for refinancing mortgages have been reduced from 90 percent to 85 percent of the value of the home. Moreover, government insurance backing on home equity lines of credit has been withdrawn.
For first time buyers a 5-year fixed rate mortgage condition has been implemented no matter whatever mortgage rate is selected by the buyer. So borrowers would now be ready for increase in interest rate if so happens. Qualifying requirements for first time buyers has also been changed. All outstanding debts like credit card bills and personal loans should be paid off. A good credit counselor can be of a great help in this case as he can help you to devise a proper budget and devise a pay off plan for your outstanding debts. Creating a monthly budget and to live in your means would be of great help. Moreover, this would help in designing a sound long term fiscal money management. Learning proper money management has become essential for the first time buyers. By making some essential financial changes now, they can easily add mortgage to their debts in future.
The Canadian government’s new rules regarding mortgage insurance guarantee will come into effect from March 18, 2011 whereas government insurance backing on home equity line of credit would be withdrawn from April 18, 2011. According to Canadian government these new rules would enable Canadians to not only manage their household debts effectively but also save some pie for their retirement.
Now the time will tell whether these changes will work effectively and positively for government or some other amendments would be required.