In case you haven't heard, Finance Minister Jim Flarhety has once again anounced changes to Government insured mortgages. These changes are scheduled to take effect beginning March 18, 2011.
So here is the quick break down on how things are going to change.
~ Maximum amortization to be reduced from 35 years to 30 years.
~ Maximum LTV amount on refinances will be reduced from 90% to 85% LTV.
~ CMHC will no longer insure secured lines of credit.
So what will be the effect on Winnipeg housing? In the short term probably not a lot. House prices are purely driven by supply and demand. With this news nobody is likely to say "now we should sell our house".
What will happen, is a number of buyers, mostly first time home buyers, will be limited on how much they can spend on their new house. So simply, people will still be buying houses just not as expensive ones. Based on a person making $40,000 a year, currently they would qualify for a $200,000 mortgage on a 35 year amortization. On a 30 year amortization that same person would only qualify for a $185,000 mortgage.
Any questions, call me direct anytime 999-9365. Allan.
