How will the new mortgage rules impact your house hunting?

This week the federal gov’t announced new mortgage rules in an attempt to cool down the housing market. So what does it really mean to you?

Generally speaking those that have less than 20% down payment on the purchase of their home will need to prove they can support their mortgage payments if rates were to increase through a stress test.  However, the impact of this new reform will vary by individual.

•  it may  mean that you now qualify for a smaller mortgage which means you can now afford a lower priced home than you could before the reform.
• it may mean that you no longer qualify for a mortgage and must continue to rent.
• it may mean there will be no change in your buying power.  The buyers that have a down payment of larger than 20% and a healthy income to support their mortgage payments will likely see little or no change to their buying power.

Time will tell what the impact on these changes will have on the overall real estate market. If you’re considering buying a home today,  it’s wise to check with your mortgage advisor on what it  personally means to you.  The changes announced are effective Oct. 17 2016. Best to understand now not when you want to offer on your dream home.