Before the world financial crisis of 2008, Canadians had an easier time getting mortgages. However, since then, borrowing regulations have become stricter. With a new Liberal minority government aiming to make housing more affordable, there is hope that some rules may be relaxed or new incentives introduced. As of now, Canadian mortgage regulations remain stringent. This blog post delves into the history of mortgages in Canada and the current borrowing environment.
After the subprime mortgage crisis in the US from 2007–2010, Canadian officials tightened rules for borrowing and lending to prevent a similar disaster. Pre-2008, borrowers in Canada enjoyed favorable regulations like long amortization periods, low down payment options, and minimal debt limits for those with good credit. However, stress testing for borrowers was not in place then. Stress tests are now common, making it harder for people to qualify for large mortgages. Amortization periods are shorter, and down payments have increased.
How to Buy Property Without a Mortgage
In Alberta, you can use an Agreement for Sale (AFS) to acquire property without needing a mortgage. AFS involves seller financing, where the buyer takes control of the property while the seller remains on title. AFS is still used in Alberta, Saskatchewan, and British Columbia. Instead of relying on traditional lenders, the seller acts as the lender.
If you’re interested in learning more about AFS, there is an AFS Home-Study Kit available for purchase in the online shop.
More Detailed Timeline of Recent Canadian Mortgage Regulation Changes
To understand how current lending regulations impact the market, it’s beneficial to examine the history of mortgage regulations in Canada. Garth Chapman, a knowledgeable mortgage broker, provides a summary of the changes to Canada’s mortgage rules since the 2008 financial crisis. Consulting experts like Garth can help navigate the complex world of mortgages.
If you require legal assistance with your mortgage or AFS in Alberta, consider reaching out to Barry, a real estate lawyer.
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