Here is a fantastic update from our good friend and mortgage broker Jake Abramwowicz:
Hello! Happy Thursday!
CMHC is changing what % of income you can use towards mortgage debt.
Currently the rule is, with credit scores of 600+, you can use 39% of your income to help getting a mortgage. Therefore a $100,000 income earner with a $2200/year property taxes and $500/m maintenance fees could borrow 4.8x their income. (As a hypothetical).
Now, with the changes of max 35% income:debt ratio, they will be able to borrow 4.2x income. This represents a decrease of approximately 12.5% LESS borrowing power. In 416/905 I don’t have to tell you what a crucial blow this is to a first-time buyer. CMHC wants prices to come down so that 100% of Canadians can ‘afford’ housing. The problem is, they’re 10 years too late for that.
**If you are a buyer that will be affected, please let me know, and let’s get in touch asap**
How to get around these rules?
- Ask the bank of mom and dad for enough down payment to get to 20%)
- Ask the bank of mom and dad to help you co-sign.
- Find a property that’s outside of your area you wanted to buy in and move to an area you can qualify for.
Waiting for the official announcement for more details which I will share instantly.
Thanks for reading.
Jake
Jake Abramowicz
E: Jake@mortgagejake.comC: 416 910 4448
