Mortgage controls hurt young buyers: expert
The latest move to rein in mortgage access will hammer young homebuyers and likely lead to a drop in home sales, an Ottawa mortgage expert warns.
After the Canadian government's decision to tighten lending guidelines, many young Canadians are left wondering about their chances of entering the mortgage market. In this article from the Ottawa Citizen, Mortgage Broker Frank Napolitano, Managing Partner at Mortgage Brokers Ottawa, shares his concerns about how these new lending regulations will affect prospective home buyers.
According to a recent report from the Canadian Association of Accredited Mortgage Professionals, 47% of all home purchases made between January of 2011 and May of 2012 were from first-time buyers. First timers are a driving force in the current mortgage market, and it is believed these new regulations (most specifically, lowering the maximum amortization period for high ratio mortgages from 30 to 25 years) will make many think twice.
The changes put forth are the government's aim to lower consumer debt without raising mortgage rates, but Napolitano believes they are focusing on the wrong area. Mortgages are a form of debt, but unlike credit card or car debt, a mortgage builds equity and the value of the property can increase over time.
For more information on how these changes will affect you, feel free to contact a qualified Ottawa Mortgage Broker.