How A New Mortgage Stress Test Could Affect You
Change is the only constant in the world and understanding how change can affect us is very important. When it comes to real estate, staying updated about all the changes in the industry could help you save a considerable amount of time and money.
One of the more recent changes in real estate is the mortgage stress test that has been in force since the start of 2018. This stress test has made it more difficult for people looking to purchase property or refinance their current mortgage.
Since the turn of the year, this new mortgage stress test has had a bearing on home seekers, The domino effect of this test has been felt among real estate lawyers as well as it has been difficult to obtain clients.
This mortgage stress test has limited the buying power of individuals by limiting the amount of money they can borrow. In addition, it hasn’t just affect homebuyers, but homeowners as well as if your mortgage is coming up for renewal, you’ll need to pass the new stress test if you decide to switch lenders (that’s because you’ll be treated as a new borrower and re-qualify). The only way to avoid the test is if you stay put at your current lender. However, this gives lenders less incentive to offer you their best mortgage rate upon renewal if they know you’ll have trouble re-qualifying under the new, tougher stress test.
While we suggest that you still play it by ear, see how the mortgage stress test is affecting the market and make purchasing or refinancing decisions accordingly.
If you have any questions about the stress test, the Kala Law Firm Professional Corporation is here to help. Please contact us by clicking here. To learn more about the other legal services we have to offer, please click here.