New Mortgage Rules - Effective March 18, 2011
Whistler
Real Estate Co Ltd, #137- 4370 Lorimer Road, Whistler, BC V0N 1B4 On January 17, 2011, Minister of Finance, Jim Flaherty, announced prudent adjustments to the rules for government-backed insured mortgages to support the long-term stability of Canada's housing market and support hard-working Canadian families saving through home ownership.
"Canada's well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped to protect us from the worst of the recent global recession," said Minister Flaherty. "The prudent measures announced today build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future."
The new measures:
- Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
- Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the re-packaging of consumer debt into mortgages guaranteed by taxpayers.
- Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.
The Canadian government's ongoing monitoring and sound underlying supervisory regime, along with the traditionally cautious approach taken by Canadian financial institutions to mortgage lending, have allowed Canada to maintain strong and secure housing and mortgage markets.
The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011. |
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What is Title Insurance?
Title insurance is an insurance policy that protects you, the home owner, against challenges to the ownership of your home or from problems related to the title of your home. The policy provides coverage against losses due to title defects, even if the defects existed before you purchased your home. A title defect is a problem with the title which prevents free and clear ownership. There are many types of defects such as right of way, encroachments (from neighboring properties), unpaid liens, etc.
Title insurance policies protect you for as long as you own the property. It protects against a number of risks that a solicitor's opinion on title may not cover.
These risks include:
- Fraud and forgery, including someone taking your title through fraud or forgery
- Encroachments that would be disclosed by a new survey (for example, a neighbor's deck being partly on your land)
- Easements (the right acquired for access to or over another person's property for a specific purpose, such as for a driveway or public utilities. This is referred to as "servitude" in the Province of Quebec) over the property that would be disclosed by a new survey.
- Zoning non-compliance (i.e. where the property use does not meet the local municipal by-laws)
- Someone other than the home owner having interest (i.e. a previous owner of the property not being discharged from title)
Title insurance is generally purchased when you buy your home or when you refinance it, although it can be purchased any time after you buy your home. You will only make one premium payment when you first buy the insurance. Generally insurance is organized by the Lawyer/Notary Public.
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This entry was posted on February 9th, 2011
| Posted in Mortgage Information
