New mortgage programs for creditworthy clients with limited down payment
RBC is launching two default insured mortgage programs that have been modified slightly to meet RBC requirements:
o CMHC Non-Traditional Source of Equity
o Genworth Cashback Equity.
These two programs allow new home buyers who have above average credit scores and good cash flow but not enough funds for a down payment to use borrowed funds or Cashback to purchase a home.
Cash or borrowed funds can be used for down payment
Through these two programs and subject to mortgage default insurer approval, clients with good credit can use available Cashback or borrowed funds toward the 5% minimum down payment for a home purchase. Clients must also qualify under RBC standard credit criteria for both the mortgage and any loan included in debt servicing calculations.
Other key details of these programs:
o Available only for home purchases
o Property must be a owner occupied primary residence and all applicants must reside at the property
o Cashback and funds borrowed for down payment cannot exceed 5% of purchase price
o Loan can be a unsecured RBC Royal Credit Line or Term Loan, and can also be obtained from a competitor
o Available to clients for one mortgage only
Only Available at RBC.
Wednesday, January 19, 2011
Monday, January 17, 2011
New Mortgage Guidelines
Finance Minister Jim Flaherty is unveiling new mortgage lending rules this morning including reducing amortization periods to 30 years
These measures were announced at about 8 a.m., just before the North American markets opened.
The new rules include:
• Reducing mortgage amortization periods from 35 years to 30 years.
• Cutting the amount of mortgage refinancing to 85 per cent from 90 per cent of home value.
• The government will withdraw insurance backing on lines of credit on secure homes, such as home equity lines of credit.
A government official said the rules are designed to push for “responsible lending and borrowing and encouraging people to increase their home equity.”
The new measures aim to reduce interest payments to help Canadians’ pay off their mortgages before retiring.
The proposed regulation comes at the heels of an announcement by the Bank of Canada that the national household debt is at a record high. They also stated that “the ratio of household debt to disposable income has reached 147 per cent.”
These measures were announced at about 8 a.m., just before the North American markets opened.
The new rules include:
• Reducing mortgage amortization periods from 35 years to 30 years.
• Cutting the amount of mortgage refinancing to 85 per cent from 90 per cent of home value.
• The government will withdraw insurance backing on lines of credit on secure homes, such as home equity lines of credit.
A government official said the rules are designed to push for “responsible lending and borrowing and encouraging people to increase their home equity.”
The new measures aim to reduce interest payments to help Canadians’ pay off their mortgages before retiring.
The proposed regulation comes at the heels of an announcement by the Bank of Canada that the national household debt is at a record high. They also stated that “the ratio of household debt to disposable income has reached 147 per cent.”
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