Affordability and Financing
Talk with your Mortgage Centre specialist to review your current income and expenses. We'll help you take into account how your new mortgage may change your monthly expenses. Securing a pre-approved mortgage with a lender that checks your credit rating will allow you to get an idea about how much mortgage you may qualify for, so you can have a price range in mind when you look at different properties.
Lenders determine affordability by looking at your Gross Debt Service ratio (GDS) and your Total Debt Service ratio (TDS). The GDS ratio is based on what you can afford to pay each month; it includes mortgage payments, taxes and utilities. The TDS ratio includes everything covered under GDS plus all your other financial obligations.
A Mortgage Centre specialist can help you do a complete analysis based on net income and projected budgets to determine what you can comfortably afford.
The pre-qualifying stage is also the time to find out about the difference between conventional mortgages and high-ratio insured mortgages. Ask about assistance programs for first time homebuyers.
A Mortgage Centre specialist will also discuss closing costs with you, such as land transfer taxes, legal fees, and other disbursements. Before you're pre-qualified, your Mortgage Centre specialist will run your credit bureau report and ask for written confirmation of income, as well as how much you plan to put down on your purchase.
Once you're pre-qualified, the interest rate may be guaranteed for 60 to 90 days from the time of your application. If rates drop, you'll get the lower rate; if they rise, you're covered. And just because you pre-qualified by a certain financial institution, you're by no means committed to that lender. We'll continue to shop the market to get you the deal that we believe will suit your needs!