Financial Channel

If I make 45, 000 with no outstanding bills to pay - would I qualify for a mortgage of 180,000?

You should talk to a mortgage broker, anything anyone says here is arbitrary

the way to calculate it on your own is as follows:

1. Find out what the monthly payments are for a $180k mtg based on todays 5 yr posted rate
2. Take that monthly amount & multiply by 12 to get a yearly total.
3. Add to the yearly total the following: Property taxes and a fair estimate of your yearly utility bills or 6 months of condo fees. (approx $1500)
4. Now that you have what it will cost to run a house on a yearly basis, take that amount & divide it by your yearly gross salary. The percentage that you get should be less than 32% refered as GDS in the financial sector (sometime the bank or cmch will let you go as high as 35%)

For your particular example:

$180k mtg @6.75% for 5 yr = $1,233.09/month or $14, 797.08/yr
Add: Property taxes (3000.00/yr for example) $ 3,000.00
Utilities Approx $1000 $ 1,000.00
GRAND TOTAL $18797.08
divided by your Yearly Gross Income of $45k

your GDS ratio is 41%, therefore you would not qualify for $180k mtg.

The only exception is if your $180k mtg was only 65% of the value of the home that is you were placing a large downpayment (appros $97,000) then the bank would most likely consider that a low risk deal and still authorize the mtg!!!!

Hope that helps!!!

sk

Go to a bank and ask them.

Dealing with a mtg broker may help you. But keep in mind he/she will either place you in a high risk lender where the terms and rates are not very favourable. Or alternatively, if he gets an approval from one of the big banks based on the info that you just provided, then I wouldn't be surprised that he/she fudged the application!!!!

So be very carefull as you are the one signing the application and the legal doc's, not your broker!!!!

sk

5 yrs - 6.75% is just the posted rate.
Talk to the bank and they will give you discount.
Also, there are new amort years out there. Instead of 25years, the new available are 30 and 35 years. These factors can help you reduce your cost of owning.

BTW, I renewed my mortgage with CIBC 5 years closed for 5.1% (amort 25 years). Not a bad rate and maybe even lower out there.

Good luck

The general rule of thumb is your income times 3. If you are under that, then no.

I think a lot of it depends on what kind of a downpayment you have.

Why not use a mortgage qualifier calculator?
https://www.vancity.com/MyMoney/Tool...gageQualifier/

example:
45k income, 5.69% 5-year fixed (Royal Bank discounted rate), $25,000 downpayment, $1200/year in property taxes (VERY low but depends on your city. Typically 1% of the purchase value), monthly heating cost of $80/month, no debt. Max loan amount of $164,120 including $3,218 in CMHC fees. Total purchase price of $185,102 and monthly payments of $1200/month including taxes & heat but no hydro.

Run some numbers. As suggested above, your downpayment matters a lot as does property tax.

a lot depends on your down payment. if you are going for 25% down conventional, no problem.

but if you're going for high ratio such as 0% or 10% down, you might have difficulty. try www.mortgagehome.ca www.canadamortgage.com www.rennie.com www.realty-vancouver.com www.penthouseking.com www.6717000.com

That's not true. I have 25% down on my condo and had a heck of a time trying to get a mortgage. Some of the other things the bank will look at is your other expenses (e.g. outstanding LOC balance, credit card balances, car payments, etc.). A lender looks at several factors and not just your down payment, income, and home cost.

maybe things are different in Ontario then. But in Vancouver a 25% down(as long as its either your money or you have a gift letter to prove its not borrowed money) mortgage is pretty easy to get.

This is an excellent tool. My fiancee and I are now house shopping, and she's been concerned with what we can afford; now I can show her.
Thanks.

when using those calculators for the credit card amount is that your min payment or your average credit card bill?

It should be your minimum monthly payment.