TYPICAL MORTGAGE QUALIFYING PROCESS
MORTGAGES FOR BUYERS:
Whether you are looking to purchase a condominium (apartment or townhouse), or a single family home, you should get pre-approved for a mortgage.
Mortgage Lenders qualify you in four main categories:
1. Income – Your ability to make mortgage and other payments
2. Credit History -Have you been responsible in the past
3. Equity – Do you have a down payment and how much?
4. Property – Is the home you’re buying worth what you think it is?
- Permanent full time employment (need letter of employment and pay stub).
- Permanent /part time employment acceptable after one year
- Acceptable present and past credit history and habits.
- Saving habits and net worth.
Debt Service Ratios:
1. Gross Debt Service (G.D.S.) =
Principle, interest, taxes and heat allowance/gross income = 32%
2. Total Debt Service (T.D.S.) =
P.I.T. & heat allowance plus monthly outside debts (credit cards, loans)/gross income = 40%
***The Gross Debt Service allowed is 32% for all applicants.
Data to be provided by applicant:
1. Letters and year to date pay stub confirming employment, tenure and gross income. Self-employed individual require 3 years tax returns and financial statements.
2. Proof of down payment from non-borrowed sources:
a) Copy of bank statements for 3 consecutive months.
b) Letter confirming family gift from a direct family member.
c) Copy of R.S.P. OR G.I.C.
Use the mortgage calculators below to assist you in making some decisions around financing your new home
Mortgage Qualification Calculator
This calculator will help you determine how much money you qualify to borrow. The results are informal. You will be subject to a credit approval from your financial institution taking into consideration existing debt load, amount of down payment, income and other variables.
Mortgage Payment Calculator & Amortization Table
This calculator will help you determine what your mortgage payments will be based on purchase price, interest rate and mortgage term, as well as other factors. The amortization table shows what the interest and principal payments will be over the term of the mortgage.