Parade of Homes

Building the Best for more than 25 years Doug Milne Milne Homes Ltd. P: 204-981-2681 E: MilneHomes@mymts.net www.milnehomes.ca Cont'd on page 40 "The new stress test regulations shouldn't necessarily be viewed as a negative," says April Nurse, manager of consumer lending at Steinbach Credit Union's Linden Ridge branch. "Part of the home-buying process for many years has been to start a little smaller than your dream home, and build valuable equity through sweat equity, utilizing prepayment options, and property value increases. Over time, this allows you to work your way to your dream home, all while being able to sleep at night knowing that your home will still be affordable should rates increase." As mandated by the federal Office of the Superintendent of Financial Institutions, the new stress test requires buyers with uninsured mortgages to qualify for either their contracted rate plus two per cent, or the Bank of Canada's five-year benchmark — whichever is higher. Up until Dec. 31, 2017 the test was only applied to high-ratio mortgages — those for which borrowers have down payments of less than 20 per cent. Typically, mortgage insurance from Canada Mortgage and Housing Corp. (CMHC) is required for high-ratio mortgages. Insurance protects lenders against mortgage default, and lets first-time buyers qualify for a mortgage with a down payment of five per cent on homes costing less than $500,000. To those who might be affected by the new rules, Nurse suggests taking a holistic look at their complete financial picture, and sitting down with a lending specialist who can speak to their individual needs. "Having 20 per cent to put down on a home is advantageous. However, if you carry a lot of high- interest debt, you may want to explore using a portion of that down payment to pay down debt and use CMHC to purchase your home. This might reduce your overall monthly payments and allow you to start the home-buying journey without a lot of extra debt." The new regulations don't apply to those who are renewing their mortgages, and unlike their big-bank counterparts, provincially regulated credit unions in Manitoba aren't required to apply them, either. PART OF THE HOME- BUYING PROCESS FOR MANY YEARS HAS BEEN TO START A LITTLE SMALLER THAN YOUR DREAM HOME, AND BUILD VALUABLE EQUITY THROUGH SWEAT EQUITY, UTILIZING PREPAYMENT OPTIONS, AND PROPERTY VALUE INCREASES. Parade of Homes Spring 2018 39

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