The deadline for the changes that were recently brought in by the Canadian government to put some caps on sectors in the housing market is April 19th, 2010.
Now, that doesn’t mean some banks and lenders haven’t already implemented the changes in advance of that date.
One of the bigger changes was that CMHC (Canadian Mortgage and Housing Corporation) will not insure the mortgages of people who are buying properties that will NOT be owner occupied. Also known as Revenue Properties.
The theory that many investors followed was to purchase revenue properties with a 5% down payment, pay the CMHC fee, and have their tenants pay down the mortgage. With just 5% down, they had more money available to buy more properties.
Did or will that modus operandi cause the market to bubble? Maybe. Maybe not. I don’t know. All I know is, it made for more buyers, then more sellers could move on with their plans.
Should you try to find a lender that will still allow you to do the 5% down to beat the deadline? I suggest you take a hard look at what you want to accomplish. When you do have to renew the mortgage on a revenue property in say, 5 years, the rates will not be as low as they are right now.
Making the requirement to put a minimum 20% down payment on revenue properties was a sound fiscal move for the future, according to many analysts.
Planning and preparation is always prudent, no matter what the situation is.
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The inventory of homes is at a low-level right now in some segments of the Edmonton and St. Albert housing and condo markets. If you are waiting until “Spring” to list your home, give me a call now!
It could be to your benefit financially to sell your home before the spring rush.
Ben Officer, CD REALTOR®
RE/MAX Real Estate (Edmonton)
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