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Time to Pay Attention to your Mortgage - Refinance Now!

Posted by Sean Stewart on 22 November 2017
Time to Pay Attention to your Mortgage - Refinance Now!

You probably have heard that there are changes to the mortgage rules that take effect January 1, 2018. Though, you might be confused on how these changes impact you. The most noticeable impact will be when you want to refinance your mortgage.

Starting January 1, 2018, when you decide that you want to refinance your mortgage you will have to qualify at a much higher interest rate. This higher qualifying rate, referred to as a stress test, is the greater of the five-year benchmark rate published by the Bank of Canada (currently 4.99%) OR the lender contractual mortgage rate plus 2.0%.

Let's look at an example and compare refinancing now versa refinancing after January 1, 2018:

Example:
                Bob and Mary have a $450,000 mortgage which they want to refinance and pay off some high-interest credit card debt of $45,000. Their house is worth $850,000, and their household income is $90,000.

 

 

In this example, after January 1, 2018, Bob and Mary will only qualify for a $420,000 mortgage amount. They will not be able to pay off their high-interest credit card debt by refinancing. They have a lot of equity in their home, but cannot access it through traditional lending. They will need to look for alternative means to access the equity.

It is essential for Bob and Mary to take advantage of this refinancing window now such that they can pay off their credit card debt and secure a new mortgage.

Are you thinking about refinancing your mortgage? Get your questions answered and start a conversation with Sean today.

Sean Stewart, Mortgage Agent
P: 905-427-9596
E: sean@ashbunmortgages.com
W: ashburnmortgages.com

Author: Sean Stewart
About: Sean Stewart has enjoyed a successful and rewarding career prior to joining Mortgage Architects. Sean worked as a professional accountant for several large financial institutions working in the mutual fund and hedge fund industry. His career has taken him to live and work in several countries, including Ireland, Poland and the USA. Following his accounting career, Sean purchased a flourishing contracting business and ran that successfully for 5 years. Sean understands the rewards and challenges of owning your own business. He enjoyed giving back to the community and helping people through difficult situations. This experience now allows Sean to specialize in guiding corporate professionals and entrepreneurs who are in business for themselves through the confusing process of obtaining the best mortgage solution. Sean uses his 20 years of experience in finance, accounting and real estate to guide you to make the right decisions for you. Sean is supported by a wonderful and talented family. Happily married for more than 10 years, Sean and his wife have a son they spoil constantly. In his spare time, Sean is an avid baseball fan and enjoys cheering for the Toronto Blue Jays, which can at times be a source of misery. In the summer, he enjoys nothing more than a round of golf with friends and colleagues, Fore! Cuban cigars are his special indulgence
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