As told by Michael Wharmby, Mortgage Broker at Innovative Mortgage Solutions
With the new mortgage regulations coming into effect on January 1, 2018, many homeowners may be wondering what they can do to take advantage of the current legislation before the new rules begin. Because these new rules affect those putting down 20 percent on their homes, any homeowner who is looking to refinance will also be subject to the new qualification requirements. These requirements involve a mortgage ‘stress test’ that both potential and current home owners will need to pass before they qualify for financing.
Some recent clients of mine were looking for a solution to get rid of excess debt that they had accumulated. With their mortgage renewal coming up, we decided to take a look at their options to use the equity in their home. After crunching the numbers, however, it was evident that these clients would not qualify to refinance their home in January. This meant that we had to move forward quickly.
Upon their renewal, we were able to secure a lower interest rate for these clients. Because renewal is an excellent time to refinance (since there are no penalties involved), we also decided to refinance their home so they could use that equity to pay off higher interest debt. Not only do they have a lower mortgage payment moving forward, they are now saving an extra $1097 per month because their other debts are now paid off.
If you are wondering about your options, or if there are ways you could be saving money before the new rules are implemented, please feel free to give our office a call at (780) 416-1085.