As of this fall (no specific date set yet) you will qualify for 25% less mortgage money than you do today.
Have you got:
- Excellent credit?
- Huge down payment?
- Loads of equity, net worth, investments, etc?
- A relationship with your bank for 40+ years?
That’s nice, but it is going to be all about your line 150 taxable income.
Not just the dollar amount, but the source(s).
- Income from liquid investments?
- Income from the sale of assets (sale of property, stocks, bonds)?
- Income from dividends?
- Income from investment properties (rental income)?
None of these are used to 100% of their value. Some will count for just shy of zero, in fact.
It will be all about employment income, ongoing personal business income, or pension income.
And that income is going to qualify you for 25% less mortgage money as of this fall.
Big Brother is watching us, regulating us, and backing us all into a corner.
Sadly, the key request made by pretty well every single industry association and economist following the abrupt changes made October 3, 2016 appears to have been ignored. Said request: ‘No more changes anytime soon.’ Perhaps our collective failing was the absence of a clock – e.g., No more changes until 2022 please.
In any event, the upcoming round of tightening, if implemented as set out, will create deeper confusion for most people seeking a mortgage, and it will remove many (estimates are ~20%) from the markets:
- New purchase
- Move-up purchase
- Down-size purchase
- Renovation financing
- Debt consolidation financing
- Access to home equity financing
- Secured line of credit requests
The bottom line: it is about to get even trickier to qualify for mortgage money.
More details next week regarding two key points:
- Basic renewals
- Moving your mortgage to a new property