sam_badmos

For many, coming up with a downpayment is the most challenging part of homebuying. Lenders want to know where your money came from and they almost always ask for proof. Here are the most common downpayment sources: ⁠
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• Personal savings and investments⁠
• Gifted funds from family⁠
• RRSP withdrawal⁠
• Home sale proceeds⁠
• Taking equity out of an existing property⁠
• Borrowed funds⁠
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🌐 𝟰𝗙𝗿𝗼𝗻𝘁𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲𝘀.𝗰𝗼𝗺⁠
📞 Sam (778) 316-5373
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As of June 1st, the federal government has increased the current mortgage stress test rules for all new mortgage applications, regardless of the amount of downpayment. Borrowers will need to prove they can afford payments based on the higher of the contract rate plus 𝟮%, or a new floor rate of 𝟱.𝟮𝟱%, up from the current 𝟰.𝟳𝟵%.⁠
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“The recent and rapid rise in housing prices is squeezing middle-class Canadians across the entire country and raises concerns about the stability of the overall market,” Finance Minister Chrystia Freeland said in a statement accompanying the announcement from the government.⁠
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In a statement released by the Mortgages Professionals Canada yesterday, “the rapid rise in prices making qualification more stringent now will disqualify many of the Canadians the government has promised to support. Since the First Time Home Buyers Incentive program also requires an insured mortgage qualification for borrowers to be eligible, the existence of this program, even with the increased limits, will do nothing to help these newly disqualified buyers.”⁠
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If you are planning to buy a home in 𝟮𝟬𝟮𝟭, please reach out to us to ensure you are pre-approved based on these new guidelines.⁠
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🌐 𝟰𝗙𝗿𝗼𝗻𝘁Mortgages.com⁠
📞 (𝟨𝟢𝟦) 𝟩𝟥𝟪-𝟪𝟣𝟤𝟪⁠ (778) 316-5373
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Last week, the Office of the Superintendent of Financial Institutions proposed a higher mortgage stress test. Currently, borrowers are required to show they can afford a mortgage payment based on a rate of 𝟰.𝟳𝟵%, despite actual mortgage rates being less than half of that. The new proposal would increase the stress test to 𝟱.𝟮𝟱% (or 𝟮% above the actual mortgage contract rate - whichever is higher). These proposed changes would be applicable to borrowers with more than 20% downpayment and would mean buyers would see a 4.5% reduction in purchasing power. The proposed date this could come into effect is 𝗝𝘂𝗻𝗲 𝟭𝘀𝘁, subject to industry consultations in May. ⁠⁠
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For now, it is business as usual which may lead to a flurry of activity as buyers try to close on deals prior to June 1st. Despite the increase to the stress test, mortgage rates are still near record low levels and are expected to remain so until the economy is fully reopened and recovered. ⁠⁠
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🌐 𝟰𝗙𝗿𝗼𝗻𝘁Mortgages.com⁠⁠
📞 (𝟨𝟢𝟦) 𝟩𝟥𝟪-𝟪𝟣𝟤𝟪⁠⁠
📞(778) 316-5373
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