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CMHC Breaking News Update

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Hey everyone! Happy Friday! It is Friday June 5th 2020 if you haven't been already invaded in your Facebook feeds, in your email inboxes, if you haven't heard yet, yesterday afternoon CMHC has made some significant changes in terms of the mortgage qualifications So this is a massive, massive change that is going to be impacting anybody in the real estate market whether you're buying or selling so I'm going to talk to you right now about how all of this is changing what is happening

So first off when you quote There's three things that they changed – there is the ability so if you're playing less than 20% down, that this is what affects you, if you're putting 20% down or more this is not going to impact you at all, so what I'm going to talk about is your credit score normally had to be 600 now it's going to be changing to 680 all these changes are effective July 1 2020 So if you are thinking about buying a home if we can get you a pending offer accepted before the end of the month before it changes, none of this will impact you and this is a huge impact

So your credit score is one, the other big one is your total debt service ratio allowance is going to change and it's going to impact what you can qualify for So for example if you qualify right now for $300,000 you will now after July 1st with no changes to your income, no changes to your like your debt, the way to qualify you if you were gonna go from 300,000 to 260,000 that is a significant drop this last time we saw something like this was a few years ago when they did that huge mortgage real change and if you can remember that really impacted Alberta as well We all know that Alberta's real estate market has been suffering in the last four or five years and this is definitely not going to help and why is the government doing this? My only speculation is we have a lot of debt that we just occurred and they don't want to increase the housing debt and so they're now trying to not encourage that which is really bad because the housing market impacts a whole bunch of other markets in the economy, so this is not good news You have until July 1st to take advantage of the current qualifying system which is the minimum credit score of 600 instead of 680 which is what it's going to change to and then the total debt service ratio If you have any questions I do have the ability to post your comments right now if you are watching and have questions, a mortgage broker is going to be your best bet to chat with to make sure we line you up and I want to make sure we have you talk to them as soon as possible because we have still the rest of this month to kind of get things in line and figure it out

Now as a seller how is this going to impact you? Well as a seller the buyers that are out right now, if you could think about this if your house is listed at $450,000 that buyer who can qualify for $450,000 it's gonna change like a good 10% that's a huge difference you're not going to want to take the price of 440 or sorry 410 so what's gonna happen is the buyer pool gets smaller for your property which won't drive your price down to that extent but it will drive the demand down and it will eventually affect your list price to be even lower so if you're thinking about selling your house you really want to make sure we get talking right away to take advantage of the market right now we can get your house on the market and take advantage of the buyers that qualify for 450 that want to get that house for 450 because the house for 450 is very different than a house for 410, same as 300 to 260 we're talking about going into the land of no condo fees to condo fees, that is going to definitely impact you as a seller As a seller if you have a lower priced home you may actually start to see more buyers come into that area, however you have to understand last time we saw this happen there was a bit of a delay from people wanting to actually purchase because they have a bit of sticker shock, to go from what they can buy to what now they are able to buy and they're not psychologically ready to pull that trigger because they're still hung up over what they were able to get So in summary I wanted to come to you and send you this message because it's really important that you are talking to somebody that knows what's happening in the market, how it's going to impact you as a seller and a buyer, you're both impacted by the news that CMHC has decided to do effective as of yesterday, I just wanted to break this down so if you still have questions, send me a message my phone number is listed here in this video, and I hope you have a great day make it a good one! We're gonna get through this but unfortunately CMHC has decided to do this and it's not going to change so July 1st is the effective date Contact me Have a great Friday! Bye everyone

Source: Youtube

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