Good Day Approved Originators!
As you are aware the Government of Canada recently announced a number of product and policy changes with regards to the Mortgage Insurance Guarantee Parameters in an effort to encourage Canadian families to reduce debt and increase savings.
Please find a summary of changes below along with our implementation process. Updated product and policy guidelines will be provded as the new policies become effective.
Effective March 14, 2011 (11:59 pm ET)...
1. Maximum Amortization Period:
High Ratio Business
· For high ratio deals, (loan to values greater than 80%) the maximum amortization has been reduced to 30 years from 35 years.
Conventional Business
· For conventional deals, (loan to values less than 80%) the maximum amortization will remain at 40 years for MERIX.
2. Refinance Maximum Loan to Value:
The maximum loan to value for 1-4 unit residential properties will be reduced to 85% from 90%.
Implementation:
· Merix will continue to accept applications and pre-approvals based upon existing policy guidelines provided the transactions become a “real deal” on or before March 14th, 2011 at 11:59 pm EST. A real purchase deal is defined as having a firm and bona fide Offer of Purchase and Sale and a financing or refinancing agreement issued (commitment issued). A real deal for a refinance transaction would be defined as a commitment issued.
· Merix will allow deals to close on or after March 18, 2011 provided they become real deals prior to March 14th at 11:59 pm EST and close within the interest rate guarantee period. 60 days for refinance transactions and 120 days for purchase transactions. Product and program specific guidelines apply.
· Should a pre-approval not become a real deal before the Merix deadlines we will honor the existing rate guarantee until expiry of the initial pre-approval provided the client qualifies under the new guidelines.
Should you have any questions, please contact your Director of Business Development and they will be happy to assist you.
