BREAKING NEWS IN THE OTTAWA MORTGAGE WORLD!
The Federal Government has announced yet another important mortgage rule change in efforts to cool the housing market by implementing what they call a “stress test”.
According to a recent article from CBC, the prediction is that the new rules will have a dampening affect on the housing market, and Ottawa will feel it.
“I think the people this will affect the most are people who may have a little bit more debt, whether student loans or otherwise … because their margins will be narrowed significantly when they are being pre-approved.”
Seifried said she still hopes to find her dream home, within the lower qualifying limit.
“We remain optimistic. We are doing our due diligence and seeing lots of houses and we know that we will find the right house eventually.”
Anyone who already has a mortgage, or who has already applied for mortgage insurance, is exempt from the new rules, which will formally kick in on Oct. 17.
Effective October 17th all insured mortgages are required to QUALIFY for their mortgage using the current Bank Of Canada Benchmark rate of 4.64% compared to using the ACTUAL rate that currently ranges from 2.39% – 2.44%.
According to the mortgage website RateHub.ca, a home buyer who now qualifies for a $665,000 mortgage will only be eligible for a $505,000 mortgage under the new regulations.
Anyone that is currently in the market to purchase a home or refinance a mortgage but have not yet made an offer or committed a live mortgage needs to RE-QUALIFY immediately.
Now more important than ever is working with a mortgage broker. Whether it a first time home purchase or someone looking to sell their a current home, you need to get pre-qualified before listing a house for sale and before making an offer on a new house. Talk to your mortgage broker, or contact Chris Steeves to find out more about these tight new rules.