• Access DeniedMortgage rates keep creeping up. Everyone seems to know that. But what some people may not realize is that it takes more than just a personal commitment or belief that you can afford a mortgage. The mortgagor or applicant is not the only one who decides if he or she is ready for a mortgage. The government of Canada largely decides that! How? Well, look at it this way. Even with the recent increases in mortgage rates, we can still get you great deals out there. You can still get fixed rates in the mid-2’s to low 3%’s range depending on the term and conditions. Very affordable, right? Maybe. But the government doesn’t care if you can easily afford those rates! They want to “protect” you by anticipating that rates will continue to increase. So, if you are putting less than 20% down on purchase, they essentially force you to prove that you could afford a higher rate known as the benchmark rate.

    So let’s say that we get you a great deal at 2.84% on a $300,000 mortgage translating to payments of $1395/mth. You look at that number and think to yourself, wow, I’m paying that much in rent right now! I could easily afford that!

    Not so fast!!!!

    The government steps in and asks you the question, can you afford that $300,000 mortgage at 4.89%? (that means monthly payments of $1726). If the answer is no, guess what? You don’t qualify!

    So please be aware if you are saving up for a nice big downpayment. Increasing rates don’t just mean that you will be paying more, they could also squeeze you out of the market. Best to speak with a mortgage agent that you trust and check your options sooner rather than later.

    Robert can be contacted at 905-574-9200 Ext. 215 OR by email at mortgages@robertfloris.com. You can fill out an application online at https://application.malink.ca:8112/App/MARC/FLORISR/en-ca/1896 with absolutely no pressure and no obligation.

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