CMHC on Its Own: If you’re buying with less than 20% down and can’t qualify under CMHC’s stricter insured mortgage rules, you still have options. Effective July 1, CMHC is lowering the maximum debt you can carry, raising its minimum credit score to 680 and banning certain borrowed down payments. But Genworth Canada said today “it has no plans to change its underwriting policy related to debt service ratio limits, minimum credit score and down payment requirements.” National Bank Financial analysts said, “The decision will help soften potential negative impacts to the housing/mortgage market…” The company essentially said its underwriting practices are prudent enough to cherry-pick low-risk borrowers who happen not to meet CMHC’s criteria. And it doesn’t approve all such borrowers. Last year, Genworth approved less than half the number of borrowers with GDS ratios over 35% than it did in 2011. According to TD analysts, Genworth “deliberately limits ‘stacked risk factors’ in its portfolio. This is defined as borrowers with an LTV 90+, credit score <=680, and TDS >40%.” That means not all non-CMHC compliant borrowers will be scooped up by the private insurers. Hence, there will be incrementally fewer borrowers who do not qualify for default-insured mortgages come July 1.
CMHC & Record 5-year Rates: More on their impacts in today’s G&M column.
$302,000 Over Asking: This is the type of thing happening in some parts of Toronto. Meanwhile, CREB says “…Average and median prices [condo] fell at a significant rate” in Calgary. That’s why it’s impossible to predict how real estate will react to the recession unless you examine the supply/demand dynamics for your desired property type in the neighbourhood you want to buy in.
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