Stress Test(s)
Holland Homes Inner Circle - Issue #4
I get anxious whenever I hear the term “Stress Test”.
Although it has nothing to do with home financing and everything to do with fitness testing in my previous career. I once ran until I fell off a treadmill because the GM wanted to see if I’d “go the extra mile”. Long story short (and lucky for my clients), I do.
Fortunately I managed to catch myself on the way down so I didn’t completely wipe out, but I certainly made a mess of the 25 sensors that were wired to me. I look back and laugh at that now, but mostly because the GM left happy and I kept my roster spot.
Look how excited I was for fitness testing at the 2009 NHL combine:
Yes, behind closed doors, professional hockey players are well paid lab rats.
But let’s get back to the matter at hand.
Good news for borrowers! Starting November 21st, those with un-insured mortgages (meaning a 20% or higher downpayment) will have more flexibility when switching lenders. This change eliminates the need to pass a stress test when renewing with a different lender. Why is this a big deal?
Potential for big savings. Borrowers can now seamlessly switch to a lender offering a better rate. Previously, even if a lender had a lower rate, you might not have passed their stress test, preventing you from making the switch.
More competition. Lenders will need to work harder to keep your business, which should result in better service and more competitive rates.
Less stress during renewal: Now borrowers can shop around without worrying about the hurdle of a stress test.
The only requirement is the borrower must maintain the same loan amount and amortization schedule.
Overall, this is a win for borrowers and the industry. It rewards those who have kept their payments current, freeing them from the same scrutiny as those with higher loan-to-value balances. Let me know if you’d like to chat with a mortgage specialist!
Not to sour the good real estate news, but check out this CBC headline:
It appears basements are the newest target in the fight against climate change. Which is a decent fight to pick I guess since they can’t hire a defense counsel. But weren’t politicians just lobbying for us to rent our free space?
It’s hard to keep up with these people. After all, it was politicians who implemented immigration on a scale that far exceeded our housing supply. Look at this chart showing Canada’s annual housing starts relative to its population increase.
Wowzers. Now they’re considering banning basements because of some flooding and climate change?
I’m not an engineer, but I’m fairly certain we need foundations below the frost line in order to eliminate shifting and other structural concerns. Maybe we’ll be allowed to do that, but say goodbye to your man cave, kids play area, storage space, or whatever else you decide to use your basement for. Our ever knowledgable government will take the burden of decision off your plate.
Population growth of that size is a stress test on all of our resources, and articles like those are a stress test on readers.
sigh
Wrapping up on two fun notes:
Here’s a Reel Sasha and I made the other day:
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If you've been following the Leafs pre-season, you saw the hit Leafs forward Cedric Pare delivered on Patrick Laine. But in case you missed it, here it is again.
I played with Pare last year and this is what I had to say about it:
Aren’t Habs fans the best… 😂
Thanks for reading!