Home financing rules changing

NIAGARA FALLS - New rules for home buyers shouldn’t affect the real estate market in Niagara, says the president of the Niagara Realtors Association.
On July 9, four rule changes will affect how people borrow money for mortgages and refinancing, how much they’re able to borrow, and how long they’ll have to pay it back.
While the changes affect the housing markets across the country, the trade-off is that interest rates will stay at record-low levels.
“Our take on it is with the affordability here in Niagara. It’s not a big deal,” said Brad Johnstone, who works for Royal LePage Niagara Real Estate Centre and is the president of the Niagara Realtors Association. “With our average sale price at $215,000, the affordability is already here.”
Federal Finance Minister Jim Flaherty announced the rule changes June 19 to keep Canadians from buying houses they can’t afford and getting too far into debt.
The four changes are: the maximum amortization period was dropped to 25 years from 30; the maximum refinancing amount was reduced to 80% from 85%; the gross debt service ratio was brought to 39% and total debt service ratio to 44%; and the availability of government-backed mortgage insurance is restricted to homes with a value of $1 million or less.
Mike Distefano, a mortgage broker who owns three Dominion Lending Centres BTB Mortgage Solutions locations in the region, said it has been a busy couple of weeks as clients scramble to get their financing arranged before the changes kick in Monday.
“We had no idea this was coming, we found out the same day as everyone else did. There were no rumours or buzz,” he said.
Distefano thinks the changes will affect people looking to remortgage their homes more than home buyers looking to get their first mortgage.
“It’s more on the refinancing side. After July 9, a lot of these deals won’t qualify,” he said. “I believe long term it’s a great thing because people have been using their homes as piggy banks — they pay some down and then take some equity out.
“I see a lot of seniors that you’d think would have their homes paid for, but they’re coming in looking for refinancing.”
But he said the timing with the current economy isn’t great, and believes the rule changes are more intended to protect the government-backed CMHC.
Distefano said companies like his will still be able to help higher-risk people get mortgages because of the availability of private financiers. “These private investors will be greedier with their rates, but you’ll find some people will be desperate.”
CHAMBERS JOIN FORCES
The Greater Fort Erie Chamber of Commerce and the Greater Niagara Chamber of Commerce have agreed to work more closely together.
The two organizations signed an agreement this week in which the Fort Erie chamber recognizes the Greater Niagara chamber as the regional voice of business.
Members of the Fort Erie chamber will be invited to participate on Greater Niagara chamber committees, and both chambers will provide on-line connections between the organizations.
HAMBLET’S WINS AWARD
Niagara Falls roofing and siding company Hamblet’s was recently given a Keys to Success award by the CertainTeed Corporation’s Roofers Advisory Council. “Hamblet’s Roofing and Siding is on the cutting edge of the roofing industry,” said Jay Butch, director of contractor programs for CertainTeed Roofing. “We applaud them for their contributions to our advisory council and their continued partnership with us. ”

For more info on this story or to ask a question regarding a mortgage please contact

Michael Distefano Mortgage Agent
Dominion Lending Centres BTB Mortgage Solutions
Phone: 905-357-5366
Cell: 905-246-5363
Fax: 905-357-6654
Toll free: 877-357-5366
E-mail miked@beatthebankmortgage.ca
Website http://www.beatthebankmortgage.ca