April has come and gone and for many of us it was a month of sitting idle, waiting for the virus to move aside so we all can get back to normal. Having said that, the signs are becoming
The government's new stress test updates
These new rules will be in force starting in April
The Department of Finance says that as of April 6, the stress test will be calculated in a new way. This will allow first time home buyers in the Fraser Valley to have better access to lending, when they are shopping for their first home as well as make it easier to secure financing for all Canadians.
The government came up with an idea to attach the new rate for stress test calulations to the "weekly median five-year fixed insured mortgage rate + two per cent."
Overall this should make it easier for customers to qualify and enjoy a more accurate gap between the posted rates and the true rates achievable in the current markets.
It also will boost buying power, even when it only does that ever so slightly, the consumer will be able to secure a higher priced property.
In an example we see the following:
Buyer with annual income of $100.000.- with 10 per cent down would qualify at a mortgage rate of 2.89 per cent and could buy a home valued at $511.424.- under the old rules. The new rules allow that same buyer now to buy a home up to $526.632.- - wich represents more than $15.000.- more purchasing power.
All in all this is good news for real estate interested parties in the Fraser Valley and these rules apply in all cities including Chilliwack, Sardis, Rosedale, Agassiz, Harrison Hot Springs, Yarrow, Abbotsford, Langley, Mission and Maple Ridge.
Frank and Sherry Heitzer are partners in business and in life. While Frank was born and raised in Regensburg, Germany, Sherry was born and raised in Langley, BC. Both of them started their working liv....