“CMHC to tighten lending rules for home buyers.”
Canada Mortage and Housing Corp. is toughening up its rules to make it harder to get mortgage insurance, a move that would reduce demand from riskier borrowers and keep prices in check at a time of economic uncertainty.
The national mortgage insurance provider will ban the use of borrowed funds for a down payment, require a higher credit score from borrowers and try to ensure that homeowners have enough income to pay their mortgages and other debts.
The new criteria, effective July 1, are designed to help weed out borrowers who are less likely to make their payments and could reduce demand for homes at a time when real estate sales have dropped.
It is not possible to determine how many potential home buyers will be affected bu the new criteria. But according to CMHC’s latest quarterly results, nearly one in five of its insured mortgage holders would not have met a least one of its new requirements.
SOURCE: The Globe and Mail.
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