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The honeymoon is over. Winter is officially here, and the Christmas holidays have begun! I don’t know about you but I have started my Christmas holiday shopping. I am almost nearly done. As you see, I am not a last-minute Christmas shopper because I am not a fan of long lineups, not finding free parking spots at the local mall, not knowing where to find that perfect gift, and frantically running around from store to store to find out that the perfect gift I wanted is either sold out or discontinued. ‘Tis the season!
Business continues to go upward as I secured a few more listings and more buyer clients. I have been securing more buyer clients because of their fear about the new stress test offered by the banks on qualifying buyers at higher mortgage rates starting on January 1, 2018. As such, buyers are calling me daily to show them more homes and putting offers. And yes, it has been “stressful”, unfortunately, no pun intended. C’est la vie!
To illustrate the concern of my buyer clients about the stress test, below is an example of a scenario about the impact of the stress test on a buyer’s home purchasing power. As you see in the table, regardless of the amount of down payment a buyer has, they have less purchasing power when they are qualified at a higher mortgage rate which is significant. This significance is the difference between purchasing a single-family home versus buying a condo, or, worse off, being denied a mortgage and forced to continue paying more rent. To avoid becoming a victim of the stress test, you will need to have an offer to purchase a home accepted before December 31, 2017.
On a positive note, I would like to take this opportunity to wish you and your family a safe and enjoyable holiday season, and a prosperous and healthy 2018!
Best regards,
Michael B. Arthur
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