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Refinancing? Don’t miss out

If you’ve considered refinancing your house for a renovation, debt consolidation or any other reason, now might be your last chance to qualify.

Earlier this year the Government of British Columbia implemented a new mortgage rule which required borrowers to qualify at 2% above the contract rate.

Example

Before new mortgage rule – Borrowers could qualify at the given contract rate: 3.59%

After new mortgage rule – Borrowers we’re required to qualify at 2% above the given contract rate: 3.59% + 2% = 5.59%

Almost all lenders followed suit and changed their lending guidelines so that borrowers had to abide by the new rule, known as the “stress test” or “B20”.

Up until this point, there were a very small handful of lenders that did not change their lending guidelines and continued allowing clients to qualify at the contract rate. This small pool of lenders has slowly dwindled down and one by one are now requiring clients to qualify under the new mortgage rule.

It has been brought to our attention the last lender that was not qualifying clients under the new “stress test”, will now be implementing the stress test to all borrowers in the new future.

Please call our team as soon as possible to discuss your options as it is unlikely we will receive any warning prior to the implementation of this rule change.

Important Update – Last Chance to Traditionally Qualify

With summer in full swing, we hope you are all enjoying the weather just as much as we are. Although our team has been remarkably busy, our families have managed to plan a getaway up to the cabin that we’re very much so looking forward to, especially considering the close call we encountered. Last year the forest fires burned their way right up to our front door on Green Lake, miraculously our cabin managed to survive.  It’s been 2 years since our last visit and to celebrate it’s survival, we plan on making this a trip to remember.

While this summer has been busier than usual, we believe it’s about to get even busier. Tomorrow, the Bank of Canada is going to make another rate announcement and if I was a betting man (which I am) I would say rates are going up. In addition to the rate increase, rumor has it ALL of our lenders will be applying the “Stress Test” within the next 90 days.

Earlier this year, the federal Government implemented a new policy which required lenders to qualify clients at 2% above their contract rate, this new rule reduces borrowing power as much as 20%.

Up until this point we were fortunate enough to have small group of lenders who were not required to follow these guidelines, which in return made it easier to qualify for a mortgage. Now there are rumblings that these two institutions will follow suit shortly and also abide by the new policy, ultimately decreasing the mortgage amount you’d qualify for. 

If you are considering any financing in the future you might want to to consider pushing that time line up to ensure you still qualify.