Or are you trying to decide when to jump in and buy your first place?

Or have you been thinking you need more space and its time to move up into a larger space?

Now is the time, specifically before January 1st, 2018!

Have you heard about the new “stress test” for mortgage qualifying?  If you’ve been thinking of buying real estate, you need to know about the rules coming into effect in the new year and how they may adversely affect your purchasing power.

Unlike previous regulation changes mainly geared towards insured mortgages (mortgages where Buyers have less than 20% down), the new guidelines are more sweeping and target Buyers with 20% or more down as well. This is a very unusual step that has left the lending world guessing how far reaching the ramifications will be. While some information has been released, the final details remain a bit of a mystery.

One thing we do know is that the effect of the changes will be huge, resulting in up to a 20% decrease in affordability, meaning Buyers will be able to buy 20% less house over night come January 2018.

So far we’ve been told the updated stress test will be applied to all new mortgages beginning in January 1, 2018. As a result of this, we may see the average buyers borrowing power reduced by up to 20%. The exception being private lending companies, whose rates are typically many percentage points above major bank and credit union rates.

Quick examples of how this affects buyers:
 
Household income of $60,000 with 5% down:
OLD RULES: mortgage of approximately $300,000
NEW RULES: mortgage of approximately $285,000
 
Household income of $120,000 with 20% down:
OLD RULES: mortgage of approximately $775,000
NEW RULES: mortgage of approximately $615,000

Call us today if you would like some more information. Now is a great time to go see your broker or banker for an update on your purchasing power. 

And don’t worry! If you want to make your next real estate milestone in advance of these changes we’re here to help. We are currently helping clients do exactly that! Timing their sales and purchases perfectly so they can achieve their real estate goals.

Call Jerry at 250-870-3888 or Elya at 250-317-1980, or email [email protected] if you have questions or would like to discuss your options.  

The roots of the Geen + Byrne family trees run deep in the fertile Okanagan soil. Born and raised in the Okanagan, Jerry Geen and Elya Byrne provide their clients with an unrivalled depth of knowledge about the local community and market conditions.