We received another fantastic email from one of our favourite mortgage specialists that I would like to share with you. It’s a great read and should help you understand your buying power.
“So – what happens to mortgage qualifying when rates go up?
A sample: $100,000 income earner today can qualify for $540,000.
If the rate goes up by 1/4, that number will drop by 2.4% to $527,000.
If the rate goes up 1/4% again, another 2.4% drop, and so forth.
If we are to expect a 1% increase in rates by the end of 2019 as some are expecting, that’ll mean this sample $100K/year income buyer will qualify for 9.6% less mortgage. In a market that is not expected to have major price gains, but is not expected to drop, that 9.6% can mean the difference between getting in or staying out.
I’m not a fan of pushing people to buying properties they can’t afford. That is NOT the point of this email. I DO want people to know that waiting will affect their ability to qualify for a mortgage, however.
Jake Abramowicz
C: 416 910 4448″
Please let us know if you have any questions about the real estate market.
Thanks!
Karen
416-390-2566
