Everything you need to know about recent changes to the “Stress Test.” The pandemic has resulted in many changes for many people, on that I think we can all agree. One thing that we are seeing more and more of, throughout these challenging times, are boutique and micro-weddings. Couples who have been waiting patiently in some cases for almost two years are now choosing to go ahead with much smaller weddings than those they had originally planned. There’s still plenty of opportunity to make them special and meaningful, and – where I sell real estate (Kleinburg, Woodbridge, Thornhill and Vaughan) plenty of beautiful spaces to hold them too! But here’s another big advantage you may not have given a lot of thought to and that’s the potential for increased and easier access to a mortgage! Here’s everything you need to know about recent changes to the “stress test” and no, we’re not talking about the stress of walking down the aisle on your big day! What is a Mortgage Stress Test?A stress test is something that is asked of every buyer when they are starting the planning process towards buying a home. In this fast-paced real estate market, many buyers are seeking pre-approvals for mortgages and as of June 1, 2021 banks, credit or mortgage lending institutions, are applying a new standard of measurement to how those approvals are taking place and that’s through a mortgage stress test. It’s when any of the above named institutions applies a specific formula to determine you capacity to pay your mortgage each month. The rules governing stress tests are overseen by the Office of the Superintendent of Financial Institutions Canada (OSFI) and occasionally are changed or updated to match both what is going on in the current economy and to ensure concerns that “some home buyers may be stretching their mortgage budgets to the max” don’t happen. In other words, the bank is doing you a favour – helping to protect your ability to pay your mortgage, even if interest rates were to climb or you experienced a temporary setback such as illness or loss of employment. What does this have to do with getting married you ask?
If you’re getting married AND keeping it small, you just might pass the test!Here’s how it works:
Don’t be frustrated by long waits for a wedding. Capitalize on these challenging times and do something a little different instead. Smaller venues, boutique weddings, simple flowers and fewer guests are actually becoming more and more popular. With the unexpected benefit of a significantly less costly wedding to pay for, you may just find yourself in a better position to afford more home for your money! In this current hot, hot, hot real estate market – having pre-approvals in place and a little more money to meet the stress test provisions – might just make all the difference between wishing for a home and actually buying one. I help you “buy with confidence,” so go ahead and ask me more about stress tests, mortgages and financing. Just don’t ask me anything about the occasional stress that arises in any marriage – even the best of them!
BURDI Real Estate204 – 3582 Major Mackenzie DriveVaughan, ON, Canada, OntarioPhone: 416.918.1611