WINNIPEG, MB - With 2018 upon us let's start those new year resolutions. With a great outlook for 2018, the government has now made it harder for you to qualify for a mortgage. How you say? Well…. Let's just say that if you are going to refinance your home or if you're awesome at saving your money they've decided to make it harder on you.
First, I want to say that as of last year, everyone that will be going through a mortgage lender will need to qualify at either the Bank of Canada rate or 2% higher of your contract interest rate. One of the groups of people that this will affect is those with who will be putting down less than 20%. For example, a family with 60,000 in household income with 5% down, and no debt want to buy a home. They talk with Michael Cabral the mortgage professional. He'll say that you will get the rate of 2.99%. With the old rules, you would qualify for a home worth $350,000. With the new rules, you need to qualify at 4.99 now which means that you can only qualify for a mortgage of $285,000.
The Second group of people that will be affected are those who are good at saving money and were able to come up with 20% down. They are great with money and are making $60,000 a year in household income, without any debt. Once again, with the old rules, if they got a rate 2.99% they would qualify for a home worth $400,000. With the new rules, they would only qualify for a mortgage of $340,000 because they would need to qualify at 4.99%.
The third group of people that the new rules affect are those who would like to take out some equity in their home. This may be because they have some credit card debt and want to get that dream kitchen. Well, guess what? Now they have to qualify at a rate that is 2% higher than their actual contract rate.
If you're refinancing, purchasing, or transferring your mortgage this will affect you by either purchasing less valuable home, preventing you from qualifying for equity to pay off your debts, and even worse, being stuck with the same mortgage lender that dictates your rate. These rules might work in other cities, to slow things down, but I think that it will hurt Manitobans.
Should you need any help with a mortgage or have any questions please message me or call because my advice is FREE! Follow me on Instagram at #mikecabralthebroker or on Facebook at Mike Cabral Mortgages for more tips. Talk to you next month.
By Mike Cabral