How This New Rule In The Mortgage Industry Could Affect You
COVID-19 has tremendously affected the economy, which has had a knock-on effect on the mortgage industry, including the stress test. A few years ago, the stress test was introduced to keep people from getting in over their heads if the market was to take an unsuspected turn for the worst and rates were to climb. It meant that it limited how much home seekers could borrow.
However, since the coronavirus global pandemic began, the qualifying stress test rate has been lowered three times. In March, then in May, and now for the third time in August, it dropped fifteen points to 4.79%.
While it means home buyers have slightly better spending power, they should understand that there is still a large gap between actual interest rates of around 2% and the qualifying rate of 4.79%. Besides, the current lower interest rates will not change soon, based on the world economy.
Consequently, it restricts home-seekers from purchasing a home due to the higher qualifying rates. It means that they will most probably continue to rent in a property market where monthly rates are high.
However, all is not lost. To enhance your chances of being approved for a mortgage, it’s essential for you to save the down payment without borrowing the money or accepting gifts. So, it’s necessary to control your spending and reduce your borrowing to improve your credit score. To find out more ways to get approved for a mortgage, give Nola Stairs a call today.
With many years of experience, I will develop innovative ways to restructure a mortgage in your favor. I’m licensed both as a mortgage broker and a realtor, which allows me to offer a comprehensive service.
My mortgage services include first mortgages, second mortgages, private mortgages, mortgage renewals, refinance mortgages, line of credit, and reverse mortgages. Besides, my realtor services include residential real estate, real estate purchases, and real estate sales. I also act as a buyers agent and sellers agent for my clients.
I serve clients across Prince George, Quesnel, Vanderhoof, Mackenzie, McBride, and Tumbler Ridge, BC. If you have any questions about mortgages, please contact me by clicking here. To learn more about the other services I have to offer, please click here.