Purchase or refinance now, before rules change in January

If you’re looking to buy and will have more than 20 percent down, or if you are considering refinancing, then you might want to do so before January 1, 2018. Why? On October 17, the Office of the Superintendent of Financial Institutions (OSFI) released new guidelines for residential mortgage underwriting at all federally regulated financial institutions. Beginning January 1, 2018, a new ‘stress test’ will be applied to all new conventional mortgages – and not just those mortgages that require mortgage insurance (down payment or equity of less than 20%).

The so-called “stress test” is designed to protect homeowners should interest rates rise. Lenders will be obligated to qualify all new conventional mortgages at the greater of the Bank of Canada’s five-year benchmark rate (currently 4.89%) or the contracted rate plus 2%. So if your contract rate is 3.29%, you will be qualified at 5.29%.

Here’s what that might mean for you:

You want to buy a home with more than 20% down. Your payments will always be based on your contract rate so this new rule isn’t costing you more. However, the new rule might change how much mortgage you qualify for. If that’s the case, you may need to look at a less expensive home, save up for a larger down payment, or reduce any other debt. Or we can take a look at a variable-rate mortgage that lowers your qualifying rate (if the rate plus 2% is less than the benchmark 4.89%) and has the option to convert to a fixed mortgage.

You want to refinance to pay off debt or buy an investment property. Here too, your actual mortgage payment will not be affected. But the new rule could slow you down by making it more difficult to qualify for your refinance. You may need to wait and accumulate more equity, or look at a lower-rate variable mortgage. If that refinance is important to securing your own financial health, get in touch ASAP.

Your mortgage comes up for renewal next year. This more stringent qualifying requirement will not apply to mortgage renewals. If you go shopping for a better deal with a new lender, however, that will require that you re-qualify… and the new rule will kick in for you too. It still is very important that we review your options together.

For illustration purposes only. Based on 25 yr amortization, 20% down purchases, 5 yr term, qualifying rate 3.29% today and 5.29% January 2018. Does not include property taxes, heat or condo fees. OAC.

Get in touch now – you have the rest of 2017 to get in under the old rules.

Going forward, I’m here to work with you early in the process to make sure you are fully prepared for your purchase or refinance. I also have access to non-federally regulated lenders that do not fall under this new guideline. I’m always here to answer your questions, so feel free to call or email at any time!

Ingrid Patry AMP www.ingridpatry.com

MORTGAGE BROKER

613.447.7737

ingrid@ingridpatry.com

How To Minimize Water Damage at Home

It’s amazing how much damage water can cause. Just two gallons from a burst pipe or overflowing toilet can wreak havoc throughout your home and necessitate thousands of dollars in repairs. Ouch!

The best thing you can do is – Act Fast!

What should you do at the first sign of water leakage? First, stop the source. It may seem obvious, but in a moment of panic, it’s important to stay calm. Turn off the nearest water valve. If you can’t find it, turn off the main water valve to your home. Next, do everything you can to soak up as much water as possible. If necessary, lift carpeting. Pay particular attention to water settling next to walls or inside duct work. Get these areas dry as quickly as possible.

Containment is important. Do your best to prevent water from infiltrating other rooms. Once you’ve got the area as dry as possible, run fans in the room along with a good dehumidifier – for at least a full day – to draw in the remaining moisture.

If, despite your best efforts, you suspect that moisture remains inside the walls, floors or ceilings, call in the professionals. There are many companies that specialize in emergency water damage control. Need a referral? Call me and I will be sure to connect you with someone that can help!

Also, consider contacting your insurance company. They’re as motivated as you are to reduce the damage.

And remember… for all your Ottawa Real Estate needs call me – Linda Lauzon at 613-728-6665 or linda@buying-selling.com