Real Estate Sky is Falling - All Because of our Government

New_mortgage_rules_for_2018

Earlier "stress test" from our government had effectively made it more difficult to qualify for a home when purchasing with less than 20% down payment.  Families had to use 4.99% (benchmark rate) to qualify for a mortgage even if their contract rate was at 2.99%.

This does not mean that your mortgage interest rate will be 4.99% but it does, however, mean you have a higher standard for qualifying for a mortgage. Qualify” means that you must prove you can afford a payment at that higher rate.

New "stress test" effectively January 1, 2018 would now affect people who are putting down at least 20% (called conventional financing).  These families would now have to qualify at the benchmark rate or contract rate + 2% or whichever is greater. (see PDF above for detailed example and further clarity)

Although overpriced single family homes have started to decline... local Real Estate boards have been posting SOLD price and sales numbers for condo and townhouses still going up.  With both of these combined, it would mean a lot of families' dream of home ownership may be out of reach in their near future (even if they were putting down 20% or more).