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How Much Can I Afford To Spend On A New House?
GDS is the percentage of your monthly household income that covers your housing costs. It must not exceed 39%. TDS is the percentage of your monthly household income that covers your housing costs and any other debts. It must not exceed 44%. Once the mortgage application is completed I will let you now the exact amount of a mortgage you qualify for.
Gross Debt Service Formula:
Principal + Interest + Taxes + Heat
Gross Annual Income
Total Debt Service Ratio Formula:
Principal + Interest + Taxes + Heat + Other Debt Obligations
Gross Annual Income
Condo Fees and Site or Ground Rent: If applicable, 50% of the condominium fees must be included in the GDS and TDS calculations. For chattel or leasehold loans, 100% of site or ground rent must be included.
What Buyers and First-time Homeowners Want To Know
Buying your first home comes with a lot of questions and emotions. We’re talking about one heck of a large purchase here! I’m guessing it’s the largest purchase you’ve ever made - no wonder you’ve got a lot on your mind. I love client questions and aim to answer them all.
Some of the questions I hear the most have to do with words - words you assumed had a straightforward definition until all of sudden they seem like so much more! These are some of the terms you’ll hear bandied about while you research your options as a first-time homeowner in James Mercure.
Income: There are many types of income. You may work for a salary, receive a bonus, you may be on a commission structure, receive tips, or maybe work for cash only. There is a mortgage for every situation but… If you don’t declare the cash income, chances are you will pay a higher interest rate for the privilege. Freelancers, don’t worry. From bloggers to graphic designers to mechanics - I’ve helped them all!
Credibility: How you treat your credit? How much credit you have? What type of credit do you have? And, most importantly, how do you utilize it?
Stability: Do you like to move jobs and houses? This plays a role in your financing. Even if you have a bit of a nomadic spirit, you’ll have to demonstrate that you’re a reliable and stable prospective mortgage client. Thankfully, we have extensive experience working with clients whose path to homeownership is anything but typical. We can help you put together the perfect application!
Collateral: What are you bringing to the table? This is your down payment. Where did it come from? Your mortgage lender will want to know that you haven’t taken on debt in order to post collateral for more debt
Can I Pay 5% For My Down Payment Or Is That Just For First Time Buyers?
It’s a myth that only first-time buyers can use 5% of their total purchase price for their down payment. In fact, anyone who qualifies can use as little as 5% down, whether it’s their first house or their fifth.
What About Using Your RSP? That’s Just For First Time Buyers, Right?
Another myth! There are some timelines that must be observed and the original amount, known as a homebuyer’s loan against your RRSP, must be repaid, but you can use your RSP again.
Can I Count On Getting The Provincial Land Transfer Tax Credit Again?
Alas, this one isn’t so flexible. This is a one time credit, just for first-time homeowners. It’s pretty strict - if you and your spouse are buying a house and one of you was a previous homeowner, you won’t be eligible for the tax refund. But we can all dream, right?
What Clients Are Saying.....
Initiate A Professional Communication.
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