This past week we received word that the government will be rolling out the next phase of “stress test”. These changes to the qualification requirements are designed to make sure all borrowers are well qualified for the mortgages they are getting. This will have impact of varying degrees to borrowers.
As of today the current stress test only affects borrowers obtaining an insured mortgage. Generally that includes borrowers with less than 20% available for down payment. Presently these borrowers have to qualify at a payment based on the qualifying rate which is 4.89% at this time. As of January 1, 2018 the latest addition to the stress test will be broadened to include conventional borrowers, those with 20% down payment or more. When this change takes affect these borrowers will have to qualify at the qualifying rate(4.89%) or 2% above the rate they are contracted at whichever is greater. This could mean conventional borrowers will need to qualify at rates upwards of 5%.
For those conventional borrowers with current pre-approvals this could reduce the amount they previously qualified for should they not purchase until January. Whether we feel this is a good program or not it is happening in January and we will find a way to work with these changes to the benefit of our clients. It is our goal to find our borrowers a way to get the mortgage that is the right fit and has the least costs. We have our borrowers best interests at heart.
If you would like to learn more about these changes and how they affect you personally or want to find out some possible solutions please give our office a call at 403-347-0774.
Jessica Bartolf & Brenda Mackay
Mortgage Alliance Advance Mortgage
