If you are planning on looking for a new Toronto home, you are likely concerned about mortgage rates. However, another thing you need to be aware of is the various rules surrounding mortgages. In this article, we will discuss three essential mortgage regulations.
1. You must be able to pass the mortgage stress test
The mortgage stress test is designed to ensure you can still afford your mortgage, even if mortgage rates go up. You must be able to afford a loan at the offered mortgage rate, plus 2% or 5.25%, whichever is higher.
For example, if you are offered a mortgage rate of 3%, then you must still be able to afford the loan even if the mortgage rates go up to 5%.
2. You must have a credit score of 680 or higher to qualify for the best mortgage rates
Another crucial factor to keep in mind when you are looking at getting a mortgage is not just how much you can afford, but also how good a credit score you have. With a credit score of 680, you can qualify for the best available Toronto mortgage rates!
If you have a credit score lower than 680, however, this does not mean you cannot be approved for a mortgage. It just means that you may have to shop around a bit more and consider some alternative lenders.
3. Properties that cost more than $1 million are not eligible for mortgage default insurance
Mortgage insurance protects lenders if a buyer cannot make their mortgage payments. If you have a down payment of 20% or less available when you are ready to buy a home, then you are obligated to get mortgage insurance. However, all mortgage insurance providers have now decided they will not cover any properties for sale for more than $1 million.
Want to learn more about mortgages? We’re here to answer all your questions!
Are you overwhelmed by these mortgage rules, but still want to buy a home or learn more about mortgages? If so, then you need to contact one of our qualified mortgage brokers. We can explain the following:
- The different mortgage rates in Toronto we offer.
- The various types of mortgages available, which include fixed-rate or variable-rate, reverse mortgages, and home equity loans.
- How we can help you with tasks such as refinancing your existing mortgage and debt consolidation.
Contact Us to Learn More About the Great Mortgage Rates We Offer
Whether you are ready to move forward with purchasing a home or just want to get an idea of what mortgage rates are like these days, our highly qualified mortgage brokers at Northwood Mortgage are here to help!
You can call us at 888-257-8130 or contact us online to learn more about what we can offer you!
