Stress Test is changing
Good News! The stress test is being lowered. Its not tremendous but its certainly a step in the right direction.
We have yet another new borrowing guideline that the federal government is amending on April 6,2020.
Here is the list of the summarized details:
• Applies to borrowers seeking financing with less than 20% down payment for insured mortgages
• Not just for first time home buyers, but everyone with less than 20%.
• Overall qualifying rate will be reduced by approx 30 basis points or 0.30% currently at 5.19%.
• This change is being made to bring the qualifying rate more in-line with the housing market.
To summarize, this modification will increase ones borrowing power approximately 3-5% more. It could be the small bump one needs to get into owning their own piece of real estate. Check out the table enclosed.
Have questions? Please reach out anytime.