On July 1, 2020, Canada Mortgage Housing Corporation (CMHC) increased it’s minimum required beacon scores for applicants from six hundred to six hundred and eighty. However, co-applicants now have no minimum beacon score. Moreover, the corporation has decreased its maximum GDS/TDS ratios to 35/42, respectively.

CMHC made this change to prevent a housing bubble as they are forecasting a nine to twelve percent decrease in house prices within one year. The move could affect the client’s purchasing power as they will now be able to afford less with lower ratio guidelines and will need a higher beacon score to qualify for the program.

Before you start to panic, please note that this new rule only affects first-time homebuyers or buyers with less than twenty percent down payment. It also only concerns buyers with a home purchase price of less than one million dollars.

Besides, while CMHC has mandated this change, the other two mortgage insurers in Canada (Genworth and Canada Guaranty) are not following suit. This means that clients will have the option to use the other two insurers to avoid the new CMHC law.

The new CMHC law could affect my clients if they were on the fence with ratios, which now no longer fit. Consequently, I will review every deal carefully to ensure I have a complete understanding of my client’s financial situation before deciding which insurer to recommend.

So if you are looking to purchase a home and need advice, get in touch with me today. With many years of experience, Deepika Grover will help you secure a mortgage. I’m thorough in my approach and make myself available outside of regular business hours to guide clients.

My services include purchase mortgages, mortgage refinancing, and private mortgages. I serve clients across Toronto, Mississauga, Burlington, Oakville, Hamilton, Niagara Falls, and the surrounding areas.

If you have any questions about Deepika Grover, a leading mortgage broker in Hamilton, ON,