Your Mortgage

There is nothing more frustrating tha falling in love with a home, only to find out you can’t afford it. What’s the best way to avoid disappointment? Figure out your finances before you start looking.

Pre-qualifying for a mortgage is the best way to find out how much you can afford. Your financial institution will look at your income, expenses and debt to determine how much they will lend you. Combine that amount with the money you have for a down payment, and that’s your budget.

Once you have pre-qualified, consider applying for a pre-approved loan. Then, when you find the home you want to buy, it will speed up the purchasing process.

Who should I talk to about my mortgage? Your bank is only one option. Mortgages are available through a number of financial institutions; you should shop around for competitive rates and options.

HLC Home Loans Canada offers a wide range of mortgage products and home financing solutions. Whether you're buying your first home, considering a renovation, or looking into your next purchase, HLC Home Loans Canada has the options, choice and flexibility to meet your specific needs.

Why should I apply for a mortgage pre-approval?

Having a pre-approved mortgage will give you the confidence of knowing exactly what you can spend on a home before you start looking. You will also be protected against interest rate increases while you look for your new home.

To request a mortgage pre-approval, call 1‑888‑562‑3284 (toll-free) or apply on-line with Home Loans Canada. Your mortgage specialist will answer your questions and help you determine which financing terms and options are right for you.

FINANCIAL RATIOS:

How Much Can I Afford Per Month?

Generally, lenders calculate that the homebuyer shouldn't pay more than 30 to 32% of gross income for principal, interest, taxes, and insurance (PITI), or 40 to 42% for both PITI and monthly debts combined.

The easiest way to make a quick estimate of the mortgage amount you may qualify for requires applying the two basic formulas used by lenders for loan application. Keep in mind that the loan balance will vary over the term of the loan, although the monthly payment remains the same.

Two lender formulas:

• 30 to 32% formula: Total monthly housing costs (PITI) = 30 to 32% (or less) gross monthly income.
• 40 to 42% formula: PITI + all monthly debts = 40 to 42% (or less) gross monthly income.