New rules for mortgage underwriting come into effect on January 1, 2018. This will affect both purchasers and sellers as it will reduce the amount purchasers are able to pay for a property.
The so-called "stress test" will reduce the amount a purchaser with a 20% down payment can pay for their potential home by 11% or more.
Household Income: Maximum Home Purchase Maximum Home Purchase Difference
Current Rules January 1 ,2018
$100,000 $617,616 $549,177 $ 68,439
$150,000 $975,506 $867,408 $108,098
Based on a 3.69% interest rate for a 5-year fixed rate mortgage with a 25 year amortization.
For purchasers with a smaller down payment, the reduction will be greater.
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Max Kamali Sales Representative
