Written on October 24, 2017
WHAT YOU NEED TO KNOW:
If you are planning to do any of the following:
• Refinance your existing mortgage
• Switch your existing mortgage to a new lender
• Purchase an investment property
• Purchase with 20% or less down
• Purchase with 20% or more down (stress tests now apply to conventional mortgages too)
You may find it harder to qualify for the funding you require.
Although rates are still low, the “stress test” levels are rising. This means that you have to show that you can manage payments for a rate that is 2% higher than your actual rate.
For example if you are given a rate of 3.39% you will need to qualify at 5.39%.
There are good reasons for this stress test. The banks are trying to discourage buyers who are stretched to their limits at current rates and who may default on their mortgages if interests rates rise in the future. Lessons learned in 2008!
If you think that these new regulations are going to affect your borrowing power, and you are thinking of buying or refinancing in the new future – ACT NOW!
After Dec.31st your options will become more limited.
Please call the Love Real Estate Group for more information – 778.557.6583