Candice Carr

Mortgage broker / owner / notary public

Kindred Mortgage Co.

New Changes to CMHC’s Underwriting Criteria

There are more changes from CMHC affecting mortgage qualifying coming July 1, 2020.

The modifications to the underwriting criteria make it more difficult to qualify for a mortgage for those who have less than 20% for a down payment.

The changes include increasing the minimum credit score to 680 (previously 600) and reducing the amount a person can qualify for by reducing the GDS/TDS (debt load) you’re allowed to have. Also, borrowed down payments will no longer be permitted.

In my opinion, and I keep saying it, CMHC should extend amortizations (number of years you can spread a loan out over) to help Canadians lower their payments but still make home ownership attainable. I feel even more strongly about this if they are going to reduce the GDS/TDS maximums. Perhaps the government should be limiting unsecured debt limits, car loans, and other high interest debts that make it harder to obtain housing, rather than making it more difficult to buy a home by tightening up the rules. Why is it so easy to qualify for a big car loan, but not a home?

The July 1, 2020 implementation date also gives very little time to those who are currently pre-approved and are out house shopping. If you are one of these people, I recommend contacting your Mortgage Broker to get a modified maximum purchase price, as that number will change with the new rules CMHC has in place.

CMHC is not the only insurer in Canada. The other two are Genworth and Canada Guaranty, who have not announced the same change as of Jun. 5 2020, however, they historically follow suit with CMHC’s changes.

The good news in all of this is that mortgage brokers are problem solvers. I’m a problem solver. I can still make home ownership dreams come true, even with the constant changes being made.

There has never been a better time to USE A MORTGAGE BROKER!!

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