Why are first-time home buyers having second thoughts?
By now, everyone has probably already heard about the tightened rules for mortgages. To refresh your memory some of the rules include forcing the borrower to prove that they could afford a higher interest rate (currently 4.64%) before they can enjoy the low rates that are available on the market today. Forcing borrowers to show that they could afford a 25 year amortization before they can enjoy the extra cash flow of a 30 year amortization. The result? Big surprise – 79 per cent of first-time home buyers will delay buying due to these new mortgage stress tests!
Who are these first time homebuyers?
Young family looking for more space. A twenty-something trying to get out of his parent’s basement. Just when they’re about to make the leap into homeownership, things get a little less affordable.
The good news?
The government seems to be taking notice. Hudak says that policy should be focusing on helping affordability rather than curbing borrowing. He welcomed the new provincial land tax rebates for first-time buyers which came into force this month which could be followed by a similar move from the City of Toronto.
This puts more money into the pockets of first-time homebuyers resulting in an economic spin off (ex. purchase of furniture for the new home).
Call Robert today for a free, no obligation, no pressure analysis of your financial situation and affordability. He will provide you with objective and honest advice as to whether or not you can afford home ownership AND have a life! 905-574-9200 Ext. 215.