CMHC is tightening the home mortgage market once again which will make it bit more difficult for certain Canadians to qualify for a mortgage.
As of May 30, 2014 Canadian Mortgage and Housing Corporation will no longer insure purchases by self-employed workers without third party income validation, and will offer no insurance on Canadians seeking to purchase a second property. CMHA says self-employed Canadians can still qualify for CMHC insurance, but must be able to provide proof of their income levels.
Former Finance Minister, the late Jim Flaherty and the Bank of Canada have for several years expressed concerns that too many Canadians risked becoming over-extended in the mortgage markets, especially once interest rates begin to rise. However, earlier this week, Bank of Canada Governor Stephen Poloz said he believes Canada’s real estate market is heading for a soft landing.
CMHC currently has about $560 billion in outstanding mortgage insurance on its books. More on the announcement here.
CMHC provides mortgage loan insurance that enables you to buy a home sooner with a minimum down payment of 5%. More on CMHC assistance here.
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