As mortgage rules have changed and are now in place as of March 18th consumers will feel the effects of these new changes quickly.
Drawing the amortization in to a maximum 30 year term from the 35 year term it had been directly affects your mortgage payment and increases the monthly amount you have to pay. Although this is not necessarily a bad thing some first time home buyers are finding they have to look at a lower priced home to qualify for the monthly payment amount without the extra help of the 35 year amortization.
Secondly is the ability to refinance your property any higher to 85% of your home’s value. Previously you have been able to refinance and utilize 90% of your homes worth for refinancing purposes. With this being pulled back it will limit your ability to access up to 90% of your home’s value. At 85% this may not leave enough cash to do a full consolidation or do that renovation you were thinking about to increase your home’s value. One way may be to consider a cash back mortgage. You are still getting advanced the 85% on the new mortgage and get up to an additional 5% back in cash on closing. As mentioned this may help with the extra money you need for a renovation or some extra dollars to pay off a few more bills.
For answers on how these new mortgage rules may affect your borrowing strategies.
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