First Time Edmonton Home Buyers
Concerned about the mortgage crisis south of the border, the Canadian government is seriously considering implementing making more stringent qualification criteria. Two major changes are at the forefront: 1. Lowering the maximum time to pay out a mortgage [called the ‘amortization’ period] from 35 to 30 years. In practical terms, take a $200,000 mortgage at 4.2% interest. A 35 year amortization period would yield a principal plus interest payment of $905.30. Reduce the amortization period to 30 years and the monthly payment rises to $973.80–over $2.00 per day increased payment.
The second major change being considered is increasing the minimum 5% cash down-payment to $10%. On a $300,000 payment, a qualified buyer would have to have at least $15,000 of cash to put towards a mortgage. In the new scenario, that minimum cash downpayment would increase to $30,000. For many buyers, getting in to their new home would either become impossible or much delayed as they set about to save up an additional 5%.
If you are considering buying a home in Edmonton this year, sooner is better than later given these changes and the possibility of a 4-5% increase in home prices in 2010.
I would be happy to assist you in getting you safely and satisfactorily into your new home!
