Talk with your Mortgage Centre specialist to review your current income and expenses. We’ll help you understand how to 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. This will help you determine a price range for looking 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 and includes mortgage payments, taxes, and utilities. The TDS ratio includes everything covered under GDS, plus all of 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 use as a down payment on your purchase.
Once you’re pre-qualified, the interest rate may be guaranteed for 120 days from the time of your application. If rates drop, you’ll get the lower rate; if they rise, you’re covered. Keep in mind that, 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 to suit your needs!