It takes about 10 to 15 minutes but, in my opinion, gives you a great foundation for the purchase.

Enjoy!

http://www.genworth.ca/homeownership/c_on-your-terms/HomeownershipWeek_Thursday.asp

• New Mortgage Rules and What They Mean For HomeBuyers
• Calculate What You Can Afford
• 10 Steps to the HomeBuying Process
• Downpayment Options
• Understanding Mortgage Insurance
• VIDEO for New To Canada
• VIDEO for Mortgage Insurance

One of Canada’s mortgage insurers are sending out some great information over the course of this week about what you will need to know to own your first place.

The first area that they are focusing on is Credit. Check out the link below for some great information.

Genworth Credit

Always wanting you to learn more about your mortgage,

Jason

The following is a link to the official press release - http://www.fin.gc.ca/n10/10-011-eng.asp

The most important points are below.

Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.

Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.

Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.

I believe that the industry has a number of clarification questions that we need answered before we fully understand how this will affect the market place this spring.

When everything is all sussed out I will be sure to update you.

Firstly, they look at the quality of a borrower- their credit worthiness and their ability to make the mortgage payments.  The evaluation of the borrower typically takes place in the pre-approval process.

Secondly they look into the quality of the property. What they want to ensure is that in the event of a borrower not being able to make their payments and in turn goes into foreclosure that they can easily market the property and get their investment back.  So you can understand that if the house is not at least of average quality then the typical purchaser is not going to want to buy it.  The lender evaluates value of this in one of two different ways.  If the file is insured then the insurer does their own internal evaluation.  If the file is not insured than the lender may request that a third-party appraisal is completed.

One important thing to note is that the quality of the property may take into account things that are beyond the scope of the physical property itself. For example, in a condominium complex, even though the condo complex may be in great condition sometimes the condo financials are not in order.This would be something that the lender would consider to be a serious issue and therefore may not lend of this property.

Why I am telling you this is not to warn you not to go to try different properties but rather to let you know what type of resistance you might find if you decide to purchase a house that is considered a fixer upper.

This is a critical area that needs to be addressed before financing conditions can be met. This is why it is so important that you send all data about the property to your mortgage broker as soon as you can after the Offer to Purchase has been accepted by the seller.