More Mortgage Rules Coming - Will You Be Affected?
As of May 30, CMHC will no longer insure home purchases made by the self-employed without third-party validation. CMHC will also no longer insure purchases on second properties.
While I agree that people looking to purchase secondary properties like investment properties or cottages should have 20% down, I find the notion of someone who is self-employed not being able to get mortgage insurance difficult to swallow. The way CMHC will be work for the self-employed is if you are self-employed and don't have 20% down, you will need someone else, perhaps a spouse or a parent, to be responsible for the mortgage with you. Meaning, if you are a forty-five year-old self-employed individual who has been making a decent living for years but you don't have 20% down, you might have to go to mom and dad for help!
These particular changes are not supposed to affect the housing market as CMHC says these changes will affect less than 3% of the units it insures.
These changes are another display of CMHC reviewing its products with a mandate of supporting stability in the housing market. CMHC has tightened Canadian mortgage rules on four separate occasions in the past few years to try to weed out marginal buyers and speculation in the real estate market.
The good news is that unless you are buying a second property and don't have 20% down or unless you are self-employed and don't have 20% down, you are safe. If you would like to purchase a property, we are more than happy to refer you to a professional mortgage broker to help guide you through the process.