Government changes to mortgage qualification
Here is the bottom line with the info you need to know:
- 20% down payment is now required for all investment or rental property purchases.
- Those purchasing a home can still buy with only 5% down.
- Those who choose a variable rate or fixed term of less than 5 years will have to qualify at a higher benchmark rate (currently 5.85%) and may not qualify for as much. Therefore, they may be forced into a 5 year fixed rate in order to qualify for the maximum amount.
- Home Owners can now refinance 90%, instead of 95% of debt consolidation, divorce, equity take out or investment purposes.
- Rental income will be treated less favourably, with the banks only considering 50% of any rental income, versus the previous 80%.
- Self Employed clients who wish to use the “stated income” program will now have to put a minimum of 10% down instead of 5%.
For more information contact:
Peter Raab
Vancouver Real Estate Agent
Labels: Government changes to mortgage qualification
