There are changes being made to MORTGAGE QUALIFYING which hasn't yet been set in stone, but if implemented, can affect all buyers hoping to get a mortgage or refinance in the next few months.
Effective June 1st, the Federal Government will be making changes to all uninsured mortgages. What are uninsured mortgages? They affect buyers who are looking to put 20% or more down payment. If you have less than 20% down payment, this will not affect you.
If you are looking to purchase with more than 20% down payment, this will reduce your purchasing power by approximately 4-5%.
Why? The Federal Government is tightening the stress test rate from 4.79% to 5.25%. For example, if you were looking for $620,000 in financing today, you may qualify for $590,000 after June 1st.
Nothing has been set in stone yet. The Federal Government may apply this for all purchases closing after June 1st so it is best to speak with your mortgage advisor TODAY.
In the meantime, if you are looking to buy, NOW would be a good time before changes to the stress test applies and you are able to apply for less mortgage. As interest rates are so low, the Federal Government is ensuring that homebuyers are able to afford mortgages if interest rates inevitably rise.
Give me a call or text if you have any questions. If you need a contact for a mortgage broker, contact me and I can send you some AWESOME brokers your way!