Today I wanted to discuss household debt and the Federal Government's stress test for mortgages.
It goes without saying that everyone needs a place to live. You either rent or buy. The Federal Government was worried about household debt so they put in the Mortgage Stress Test. The bottom line is that no matter what your interest rate on the mortgage is, you have to qualify either at 5.34% or 2% higher than your mortgage rate, whichever is higher. The impact of this change of course simply is that clients qualify for a lower mortgage than prior to the stress test.
Do you ever wonder why, if the Federal Government was/is so worried about household debt why did they not put in a stress test for qualifying for credit cards and car loans? Recently I had a client who is 25yrs old, has worked in same job for three years now, earns about $70k a year, and within 3 minutes was approved for a $14k credit card in addition to the two credit cards they have now. I had another client recently who rec'd a very large vehicle loan with a payment of approx $800/m. This, along with their credit card debt has not allowed them to qualify for a very large mortgage and purchase price of a home.
It seems to me there may be an issue with household debt in Canada, but I don't think it is with mortgage amounts and purchase prices of homes, I think the issue is around credit card debt and vehicle loan access and qualifying guidelines.
I would be more than happy to discuss your personal financial plan in detail to ensure you may qualify for the home you so deserve!
Call Me - #KevinMroczek today! #Athabasca #Boyle #LaclaBiche#MortgageBroker #experiencecounts