Ottawa has toughened some rules for mortgage refinancing…

Last week I wrote about qualifying on the 5 year rate.

Number 2 on the list of mortgage changes is limiting the maximum refinance value to 90% of your property value. Previously you were aloud to tap into the equity in your property up to 95% loan to value.

The aim of such a change is to use your property as a savings tool and not a ‘piggy bank.’ If property values continue to rise this measure will not really be as “scary” to homeowners as it’s initial announcement without explanation.

Flaherty’s initial aim is to “stabilize” the housing market, derail “reckless speculation” and avoid a “housing bubble.” All in all I think these measures will indeed lead to a stabilizing in the housing market, they will help reaffirm to Canadians the importance of paying down your mortgage, spending wisely and protecting one of your most important needs (Shelter.)

Canadians will still be aloud to use refinance funds as in the past, just not as much as they previously where allowed access to.

For those homeowners who have had some difficulties over the past in saving or who have fallen into debt through lines of credit, credit cards or loans, now is the time to admit your mistakes. Don’t be too proud to admit your situation, write down a list of your debts, your monthly payments on those debts, figure out what you earn each month and make the commitment to change. Refinancing now may give you the disposable monthly income to pay down a single debt (your mortgage) instead of interest only payments on high interest loans and credit cards.

I urge you to speak to an Accredited Mortgage Professional, your information will remain confidential and in a short detailed conversation you will have a mortgage solution and product that works for you!

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