Mortgage changes coming in 2018

I have had a lot of clients ask me lately, I hear there are new mortgage rules being implemented in the new year so do I need to get into home ownership now to avoid these changes? There are a lot of miss conceptions about what is coming so I hope this can shed some light on the topic. Affective January 2018 anyone regardless of the % down payment you have you will have to quality at the bank rate of 4.84%. Now you do not actually pay that interest rate, you pay whatever your lender / bank is offering; example RBC 5 year fixed rate today is approx. 3.29%. What this does typically is push down the actual amount you can qualify for therefore resulting in spending less then possibly anticipated on your home. Now these changes do not affect anyone putting less then 20% down as last October 2016 the government already implemented this stress test which forced anyone putting down less the 20% to qualify at the bank rate which then was (4.64%) which has been increased to the 4.84% since that date. So anyone putting down less then 20% was already abiding by these rules from last year. If your intention was to put 20% or more down now may be the time to buy to avoid these decreased qualifying amounts that may affect you. The media portrays that these rules will affect most with no detail on exactly what thnges really are. So short end of this is if you are putting less then 20% down this will not affect you in anyway. If you intended to put more you may want to visit your bank or broker prior to January to evaluate how this may change your finances. As always I am here with any questions or concerns regarding this topic and would be happy to help get you into your next home.

 

Kaitlin Riley

Kaitlin Riley

REALTOR®
CENTURY 21 Fusion
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