A Simple Guide to Qualifying for More

Understanding the Basics

Qualifying for a mortgage in Canada may seem like a maze, but fear not. In this guide, we break down the essentials without the confusing jargon, so you can navigate the process with confidence.

The GDs and TDS Demystified

Before diving into the specifics, let's demystify two crucial acronyms: GDs (Gross Debt Service ratio) and TDS (Total Debt Service ratio). These percentages are the key to unlocking your mortgage potential. GDs is all about the portion of your income dedicated to housing expenses, while TDS includes all your debts. Generally, a good credit score (680 or above) opens doors.

Crunching the Numbers

Picture this: you earn $100,000 annually. According to the standard rules, 39% of this can go toward housing (GDs), and 44% toward all debts (TDS). But wait, there's the stress test introduced in 2016. You need to prove you can handle payments at 2% above your interest rate. For example, with a 5% rate, you'd qualify based on a 7% stress test.

Qualifying Scenarios Unveiled

Let's dive into specifics. Using a hypothetical scenario of $100,000 income, property taxes of $3,000, strata fees of $350, and heat costs of $100, you could qualify for a mortgage of $377,500 as of 2023. Manipulating factors like debt payments and amortization period can impact this figure.

Strategies to Boost Your Qualification

Now, let's talk tactics. How do you qualify for more? Here are some straightforward tips:

1. Mind Your Credit Score: Pay attention to your credit score. A good score (700 or above) can remove limitations on borrowing.
2. Optimize Your Down Payment: Putting down 20% or more can open doors to higher qualification ratios, giving you more borrowing power.
3. Leverage Rental Income: If you have rental income, it can significantly boost your qualification amount. Different lenders may have varying approaches, so it pays to work with a professional

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The Professional Advantage

Working with a mortgage professional is your secret weapon. They can navigate the nuances of different lenders, understand guidelines, and help you strategize for a higher loan amount. It's not just about numbers; it's about finding the right path tailored to your unique situation.

Take Control with Our App

Feeling empowered? Head to the comments section, where you can download our conservative mortgage app. While it provides a general idea, keep in mind that the actual figures might be even better. Let's embark on this journey together. Your dream home might be closer than you think!