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There are new challenges to the housing market with federal mortgage rules that were announced last month and were in effect October 17. A new stress test will be realized for insured mortgage applications that are for longer than 5 years. This ruling has been issued to help stabilize the housing market where prices in Toronto and Vancouver have steadily increased over the years.

So what does this mean as a first time homeowner or anyone who will make a purchase with less than 20% down payment? With today’s mortgage rates advertised around 2.5%, the stress test will follow the Bank of Canada’s current posted rate at 4.64%. For example, if you earn around $75 K, have approximately $500 in debt (non-mortgage) and saved for a 5% down payment, with the old rules you would be eligible for a house worth around $370K. Now it would mean you would qualify for a home worth about $285K. As a first time home owner it may mean:

  • Save more for a down payment
  • Settle for a less expensive house
  • Wait until you make more salary in the future

Your financial institution or broker can help you find the best rates and help counsel you on what you can now afford. The Huffington Post have an easy chart that helps you understand what effect the new rules will have on you.

Now more than ever you will need the advice and help from your realtor. At Winch Walton we can help you find the house you qualify for by vetting various inventories of houses to suit your needs before they are listed on the internet. They will help you find dwellings that you can now afford. You will want to move quickly as there will be more interest for affordable housing than ever.

This also goes for help selling your home. The Winch Walton Team is also there to help you sell your home by offering advice and staging your home to help you get the best price you can. This is especially important with the new rules, as you will be using your equity from your previous dwelling to buy a new home. The Winch Walton Team has expertise in staging, selling and helping you buy your new place. Rest assured even though the new rules may seem scary for some, getting knowledgeable advice from the experts is always the right way to go.

Call the Winch Walton Team today for free home staging and benefit from the team’s list to sale ratio of 98.8%. Don’t feel you need to have everything done, as the team will give you exceptional advice on how to sell your home and purchase your next one.

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