New Mortgage Rules : What You Need to Know and How They Impact You
Come December 15th, 2024 there will be exciting changes to mortgage rules that could impact both buyers and sellers. If you’re looking to enter the housing market or make some moves, these updates are worth knowing. Let’s break down the changes and what they mean for you:
1. Higher Threshold for Uninsured Mortgages: $1 Million to $1.5 Million
The threshold for uninsured mortgages has increased from $1 million to $1.5 million. This means you can now purchase a home under $1.5 million with less than a 20% down payment. Specifically, as of December 15th, the down payment breakdown is:
This change opens the door for more buyers to afford homes priced up to $1.5 million. More families will be able to find homes that suit their needs.
Sellers can now take advantage of the increased buyer pool, and potentially give a price boost to homes that were in the $1 million range that listed for slightly under to accommodate the previous threshold of $1 million.
2. 30-Year Amortization for First-Time Buyers and New Construction
Another big change is the introduction of a 30-year amortization for first-time home buyers and all new construction. While this extends the time it takes to pay off a mortgage, it helps reduce monthly payments.
How does this impact the market?
This will improve affordability for first-time buyers and might also be beneficial for new construction homes. However, some developers’ lenders still require a 20% down payment for financing. This rule may be most helpful for completed new homes under the $1.5 million threshold.
3. No Stress Test for Refinancing
Previously, if you were refinancing an uninsured mortgage and stayed with your current lender, you could skip the stress test. However, if you wanted to shop around to different lenders the stress test would be applied. As of November 21, 2024 the Office of the Superintendent of Financial Institutions will allow uninsured mortgages to shop around.
How does this impact the market?
Homeowners now have more options for refinancing, which could lead to competitive rates from lenders. Plus, this change might prompt current lenders to step up their customer service to retain clients.
So, How Do These Changes Affect You?
If you’re wondering how these new mortgage rules might help your family make a move, feel free to reach out—I’m always here to help guide you through the process!
Come December 15th, 2024 there will be exciting changes to mortgage rules that could impact both buyers and sellers. If you’re looking to enter the housing market or make some moves, these updates are worth knowing. Let’s break down the changes and what they mean for you:
1. Higher Threshold for Uninsured Mortgages: $1 Million to $1.5 Million
The threshold for uninsured mortgages has increased from $1 million to $1.5 million. This means you can now purchase a home under $1.5 million with less than a 20% down payment. Specifically, as of December 15th, the down payment breakdown is:
- 5% for the first $500,000
- 10% on the balance up to $1.5 million
This change opens the door for more buyers to afford homes priced up to $1.5 million. More families will be able to find homes that suit their needs.
Sellers can now take advantage of the increased buyer pool, and potentially give a price boost to homes that were in the $1 million range that listed for slightly under to accommodate the previous threshold of $1 million.
2. 30-Year Amortization for First-Time Buyers and New Construction
Another big change is the introduction of a 30-year amortization for first-time home buyers and all new construction. While this extends the time it takes to pay off a mortgage, it helps reduce monthly payments.
How does this impact the market?
This will improve affordability for first-time buyers and might also be beneficial for new construction homes. However, some developers’ lenders still require a 20% down payment for financing. This rule may be most helpful for completed new homes under the $1.5 million threshold.
3. No Stress Test for Refinancing
Previously, if you were refinancing an uninsured mortgage and stayed with your current lender, you could skip the stress test. However, if you wanted to shop around to different lenders the stress test would be applied. As of November 21, 2024 the Office of the Superintendent of Financial Institutions will allow uninsured mortgages to shop around.
How does this impact the market?
Homeowners now have more options for refinancing, which could lead to competitive rates from lenders. Plus, this change might prompt current lenders to step up their customer service to retain clients.
So, How Do These Changes Affect You?
If you’re wondering how these new mortgage rules might help your family make a move, feel free to reach out—I’m always here to help guide you through the process!
