Real Estate law in Mississauga- Mortgage rule changes you must know
about
It's no secret that interest rates have been a record low in
since 2017 and home buyers have been availing this opportunity till it's here.
Real Estate market is booming and first time home buyers are seeing this as
their chance to own their dream home. But there's a catch.
Provincial and federal governments have introduced new mortgage
rules to hose down the hot real estate sector. NDM Law, experts of realestate law in Mississauga, tell
you all you need to know about these changes.
For all those who’ve heard about the low interest rates and
intend to buy a home but are not aware of the mortgage rule changes, here's a
quick reminder of the latest mortgage rule changes.
●
Owing to a lack of insured mortgages in the last year,
borrowers would now have to meet a stress test of income to qualify for loan of
one million or less. The rate for stress test is not to be the proposed lowest
mortgage rate that you're eyeing but instead 2% higher than the proposed
mortgage rate. This will certainly cool down the enthusiasm of majority of home
buyers.
●
From January 1, 2018 onwards, legislation has decided
to take some burden off the shoulders of Ontario Municipal Board. Load shedding
includes restricting its power to hear and decide upon zoning disputes in
Ontario. That means developments will get delayed in the absence of an
efficient appellate body. Delayed development is likely to bring about a supply
and demand problem. In the absence of supply, demand in real estate sector is
also expected to go down as properties become more and more expensive.
●
The regulations have not exempted insured mortgages as
a stress test will be applicable to borrowers who've made a down payment of
more than 20%. The proposed rate for stress test for such buyers is 2% higher
than the fixed 5 year mortgage rate. Fixed rate already being higher than
variable rate, this rule will eventually bring down the purchasing power of
buyers. Thus they may have to settle for something less than what they were
able to afford previously.
There are some exemptions from this rule. To know about the
possible exemptions and for expert guidance on real estate law in Mississauga, contact NDM Law today.
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