A move by two lenders to change their calculations on debt servicing ratio’s for both Visa and Lines of Credit is frustrating. Instead of using the interest only payment or 1% of the balance two lenders are now using 3%. This greatly affects qualifying ratios when purchasing a property. They are also now making clients use a payment in their qualifying ratios for secured Lines of Credit, even if the balance is a zero. “The implications of these changes in underwriting could be huge if it catches on with all lenders”. Fewer people will be able to qualify to purchase a home.
Lender qualifying changes make a BIG IMPACT