lending guidelines, many young Canadians are left wondering if there's still a chance for them to enter the housing market. In this article from the Ottawa citizen, Mortgage Broker and Managing Partner Frank Napolitano of Mortgage Brokers City voices his concerns about how these changes will affect home buyers, specifically those just entering the market.
First-time buyers have been a driving force in the housing market for the last five years, and the move to decrease the maximum amortization period from 30 to 25 years is believed to make first-timers think twice. In this interview, Napolitano said, "There are a lot of young Canadians who are renting right now and have aspirations to own a home and this is setting them back two or three years." A recent report from the Canadian Association of Accredited Mortgage Professionals stated that between January of 2011 and May of 2012, 47% of all home purchases were made by first-time buyers.
The changes set forth in the June 21st announcement are an attempt to slow the accumulation of consumer debt, however, Napolitano believes the wrong area is being targeted. Although a mortgage is considered a debt, it also builds equity and increases in value as the borrower pays the mortgage down. "The message we're giving to young Canadians is, it's OK to have bad debt like credit cards. The government is doing nothing about that stuff. But, they are going to clamp down on good debt which is a mortgage," Napolitano stated.
Any home buyer with questions or concerns about the recent guidelines and how they will be affected are strongly urged to seek the advice of a professional Mortgage Broker.
To read the full article from the Ottawa Citizen, click here.