How these new changes as of Jan 17 2011 will affect home buyers

2011-01-19 | 19:37:48

Q: Hi Vince can you please explain what changes these new mortgage rules will have on new buyers and is it true that i have to put 15% down payment on a purchase from now on?. Thank you Rosalia

Hi Rosalia,
When purchasing a home for principle residence you DO NOT need to put a minimum of 15% down payment.  You can still put as little as 5% down.  What has changed is that Maximum Amortizations have been reduced from 35 years to 30 years. People who wish to refinance and /or take equity out of their home CANNOT EXCEED 85% loan to value of their home.  These changes are meant to help  encourage responsible lending and push people to increase equity rather than debt in their homes.  The new rules will be taking effect on March the 18th of this year.