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Poll: New rules sideline 15% of homebuyers

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Guest | 09 Jul 2012, 04:54 PM Agree 0

The result jive with the expectation of many investors, although some anticipate a higher percentage of first-time buyers – especially those in Toronto and Vancouver – will be shut out of the market for the same reasons. It's something that should strenghten the rental market.
Those new mortgage rules came into effect Monday, with most broker lenders instituting even earlier deadlines.
The BMO poll suggests that nearly half of Canadians know next to nothing about those key changes around amortization, refinances and debt-service ratios.
Specially, nearly half (49 per cent) of Canadians are unfamiliar with the new measures put in place by Finance Minister Jim Flaherty, according to the poll conducted by Pollara.
In fact, the majority of Canadians do not know the maximum amortization period for government-insured mortgages, with only 45 per cent correctly identifying it as 25 years.
About, one-quarter (26 per cent) of Canadians believe the maximum amortization period for government-insured mortgages is 30 years or more.
Mortgage brokers are expected to take on a key role in helping bring consumers into touch with those new rules. That has the potential to strengthen the industry’s reputation as true partner to homebuyers, say brokering veterans.
  • jeff sim | 11 Jul 2012, 09:14 PM Agree 0
    although no one likes to see an economic bubble that could burst, in any industry, no one can predict if you even are in a bubble, or just a long anticipated growth and prosperity that people are experiencing.

    Goverments typically are slow to react, they need to study, go to commitee, postulate etc etc before making a decision, as a result a lot of decisions are slow in coming and maybe no longer needed if the market self corrects.

    Word has it that the vancouver and toronto markets are already slowing naturally. so Jim's Flaherty's decision to remove a tool (30 and 35 yr amortizations) that is ingrained and part of the fabric of the real estate industry across the board is using a blunt instrument to correct something that may not need correcting. here is a few questions:

    1. Is it wise to prevent or delay 15% or more of buyers from entering the market, purchasing a home and starting to build equity, security and long term wealth. thier building wealth will help to spur the economy.

    2. in a rental market that is already very tight right across the country, this will only make it tighter.

    3. this effects all Canadians and all regions, even if the local market was not out of hand, if any ever were.

    4. soft markets or those that are just motoring along with the local economy will be artificially, negatively impacted

    5. A first time buyer with a modest income of $50,000 has just had $25,000 to $30,000 of purchase power ripped out of his pocket. If the new buyer can afford less it goes without saying that the homes in the first time buyers price range may have to come down in price. So now what happened to the buyer that just purchased a month or 2 or 6 ago, his home effectively will be reduced as well. If he finds that he needs to sell,---- he may not be able to.

    all because of the blunt instrument and gov;t intervention in the free market which was using the tools that the gov't had laid out years ago and gotten used to. Free markets adjust to the market conditions and react to the buyers and the sellers will. Change the rules and you have gov't intervention.

    bad business
  • Angeles | 27 Aug 2012, 12:38 PM Agree 0
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  • Specials Cape Town | 28 Aug 2012, 02:42 AM Agree 0
    Useful article, you always think up the most practical subjects & Poll: New rules sideline 15% of homebuyers is absolutely no exception.
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