New Mortgage Qualifications for CMHC Insured Mortgages-Effective July 1st
- Limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to our standard requirements of 35/42;
- Establish minimum credit score of 680 for at least one borrower; and
- CMHC will no longer treat non-traditional sources of down payment funding, such as a personal unsecured line of credit, as equity for insurance purposes.
What does this mean to the numbers?
In a nutshell your buying power is reduced by approximately 12% . Using the current mortgage qualifying rate of 4.94% and GDS limit of 39, a family with an annual income of $100,000 and a 10% down payment would have qualified for a home valued at $524,980.
Under the new GDS limit of 35, the same household can now only afford a home of $462,860.
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