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The federal agency has indicated that it amended the credit score required to get mortgage insurance.
The private provider of mortgage insurance for Genworth MI Canada said on Monday it would leave unchanged its underwriting standards, despite the decision of one of its main competitors to tighten requirements for mortgage loans.
The company-Oakville, Ontario, stated Monday that its insurance subsidiary, which is one of the largest insurers in the country for residential mortgage lenders, ” did not intend to change its underwriting policy, in respect of the limits of the ratio of the debt service, the minimum credit rating and investment requirements “.
The announcement follows a decision by the canada mortgage and housing corporation (CMHC) in the last week. Its new criteria will complicate the task for Canadians who want to borrow money to buy a house.
The federal agency has indicated that it amended the credit score required to get mortgage insurance, increasing to 680 points, whereas it was previously limited to 600 points. The ratios of depreciation to gross and total debt will be limited to its standard requirements of 35 and 42, respectively. The ratios of the debt service of households, a measurement of the amount of income devoted to the payment of interest and principal.
According to the president and chief executive officer of Genworth Canada, Stuart Levings, the insurer believes that its processes and its monitoring of conditions and of the evolution of the market ” to judge and prudently manage its exposure to the mortgage insurance segment of borrowers with lower credit ratings or ratios of debt service are higher “.