New CMHC Insurance Rules

New CMHC Insurance Rules

By

Team Mundi
*

Published in

Real Estate News
*

06 Jul 2021


Only after 1-year CHMC has decided to ease on mortgage insurance rules. In June 2020 CHMC announced they were reviewing the Underwriting Criteria of mortgage insurance due to COVID-19 affecting the housing market. In June 2020 CHMC was predicting the home prices to drop by 9-18%.

On July 5th 2020 CHMC announced they are easing their mortgage insurance rules as they rules set in 2020 were not as effective as they had anticipated. Due to the tighter rules CHMC lost business to their competitors. The announcement from July 5th included to consider lower credit score and some other measurements that will help the buyers.

Most lender now require mortgage insurance if the down payment is less than 20%. Under the new rules at least one of the borrowers with credit score of 600 can qualify for the CHMC mortgage insurance as well as ratio of 35/42% have gone up to 39/44%. This will allow buyers to get higher mortgages.

The rules will be effective as of July 5th 2021 returning to pre-July 2020. These new changes will allow buyers to qualify for higher mortgage. The housing market has been steadily going up over the past year and CHMC felt this was the right time to make the adjustments to fulfill the financial stability.

Since last year the insurance market has dropped significantly. With the real estate market that is still strong and steady on buying and selling this may be one the good best news as the buyers now will have more options.

As all mortgage insurance companies work closely with mortgage Agents and Underwriters to ensure the borrowers receive the best services. As complicated mortgage underwriting seems to be; Mortgage underwriting process consists of 3 C’s of Credit which are Character, Capital and Capacity. All of the 3 C’s are crucial to obtain mortgage. Once the all the documents are provided to the mortgage specialist and submitted to underwriter, the documents are reviewed by underwriter for approval of your mortgage. We have been closely working with many experienced mortgage specialists with many years of experience to help our clients with the best services.

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