06/07/2020
Some significant changes coming in very short order from our friends at CMHC.
We will see the loss of enhanced debt servicing for clients with strong credit scores, a strong increase in the required minimum credit scores for buyers on a home purchase application and the loss of allowing for non traditional down payments - Flex Down Program.
We have talked about the changes regarding minimum credit scores. Some banks have already brought on internal guidelines with respect to credit management, this will bring it to a national across the board policy.
This is even more reason to ensure that you are pre approved well in advance of home shopping as credit limitations and hiccups can take time to amend.
While the other 2 insurers have not announced the changes, we will see over the coming days what policy shifts they may take.
Effective July 1, 2020, the following changes will apply for new applications for homeowner transactional and portfolio mortgage insurance:
- Limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to our standard requirements of 35/42;
- Establish minimum credit score of 680 for at least one borrower; and
- Non-traditional sources of down payment that increase indebtedness will no longer be treated as equity for insurance purposes.
Contact me if you have any questions.
Tanya Norton
www.brokersarebetter.ca
[email protected]
403-589-0084
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