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Self Employed Mortgages & CMHC – Is It The End For Self Employed Mortgage Insurance?

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salaried iconIs this the end of stated income mortgage insurance or a push to reduce the risk to the crown corporation? Many think this is the first steps in the crown corporation to offset the risk to private insurers.

 

CMHC controls a majority of the market with just two other insurers that are private. CMHC is getting out of the market of second homes and requires self-employed Canadians to have third party income validation. (Job letter paystub, NOA, 3rd party audited financials etc.)

child tax credit iconIf you are purchasing a home with less than 20% down payment through a Canadian regulated bank then you must get mortgage insured. CMHC is 100% secured by the federal government while insurers like Genworth & Canada Guaranty are only 90% backed.

 

Moving forward CMHC is looking to invest in less of the market and has a mandate to get smaller.

These tow programs according to the release will only effect three percent of CMHC’s insured business volume.