Mortgage stress test is the buzz phrase in mortgage lending for 2018. Every borrower, regardless of how much down payment you’re making, must pass a stress test to qualify for a mortgage. The math is simple, yet intimidating. Lenders must now use your mortgage contract rate PLUS 2.00% to qualify you.
Yes, that’s correct. You need to qualify at a rate that’s 2.00% higher than your actual rate. And it doesn’t matter if you have 35%, 40%, 50%, 60% or even 70% down payment. That will not have any impact on your approval. It’s all about how much income you can prove you earn and the strength of your credit worthiness.
For many, this new rule will prevent them from qualifying for a mortgage. And for seniors or people approaching retirement who still require a small mortgage to get through the next 10 or 20 years, these new mortgage rules are a killer. The stress test is surely causing stress among many Canadians!
I’M RETIRING AND WANT TO STAY IN MY HOME…
A reverse mortgage is a terrific option for homeowners who are at least 55 years old. It empowers them to be able to stay in their home and access tax-free equity without having to make regular payments.
Continue reading “Reverse Mortgages growing in popularity… Product of the year 2018?”
Today we saw 2 announcements…. For the first time ever, we saw a 5 yr fixed rate being offered for 2.99%. This is not a No Frills mortgage… so you don’t have to worry about minimal prepayment privileges, or restricted payout options, and no monkey business when it comes to penalty calculation…. You probably won’t see a lot of publicity about this because of the mainstream media was quick to promote the BMO NO FRILLS mortgage as the first 5 yr fixed mortgage under 3.00%….earlier this year. But I can tell you, it’s a significant milestone.
And we also saw the introduction of the lowest Variable rate mortgage in almost a year… Prime less 0.35%, or 2.65%. This isn’t one of those NO FRILLS Variable rate mortgages that is full of restrictions… you have all the regular options including being able to lock into the BEST discounted fixed rate at any time.
These 2 offers are very special… They don’t come with hidden clauses or back door penalties, or exit fees. These products are legit!
The driver behind the pricing is competition, the increased spread in profit margins and a slowing housing market.. The thirst to grow a business and keep the business on the books is going to see a lot of competition…. and the winners are us… the borrowers…
If you want more info on these rates or other mortgage related issues, call me anytime.
416 224 0114