Well its that time of the year again, no I’m not talking about the start of the NHL season or all the hit new TV’s shows-it’s Mortgage Rule Changing time, except this is not as fun as the other two things and this one does effect the possibility of you purchasing a home or not……So what changed well a few things but the one that will effect you the most is:
As of October 17th, 2016 all insured mortgages, regardless of term or type, will be required to qualify at the bank of Canada posted rate.
To put that in perspective.
Family Income $80,000
Monthly Debts $500
Property Taxes $3,500
25 year term
(Qualification rate today is 2.39% and after will be 4.64%)
Today that family can buy a home worth approx. $393,000 but after the 17th that drops to $310,000. That is a large decrease to say the least.
The rate you pay will not change, just the interest rate we have to use to qualify you for the loan.
Mortgages with a loan to value of less than 80% were not subject to the same stringent rules as those with less than 20% equity. As of November 30th, 2016 that will change and mortgages will all be subject to the same lending criteria.
I cannot stress enough the necessity of making sure you speak to a well-qualified mortgage professional before you make any decisions about buying or selling in case you are one of the folks affected by these changes. I will keep you up to date on any changes that come down the road. As always any questions as always feel free to contact me anytime (403) 831-7869 firstname.lastname@example.org