Experts advise people with a high ratio of debt to income to never make changes that could require them to be requalified before the mortgage closes, such as increasing debt load, changing the mortgage term, etc.John Bazemore/The Associated Press
Some mortgage applicants with high debt loads got an unpleasant surprise last week.
They submitted their applications for variable-rate mortgages, were told they qualify, and then the Bank of Canada hiked rates, by a startling one percentage point.
Lenders quickly increased their prime rates by the same amount.
Mortgage default insurers saw this, and decided that new borrowers should prove they could afford a much higher “stress test” rate, even if rates were lower at the time they applied.
That led to some lender approvals being overturned, triggering outrage from affected homebuyers and mortgage professionals.
On Tuesday, this country’s…
