Qualifying for a home loan, you need to work on this formula. Add your monthly mortgage amount + heating bills + your credit cards amount + other loans+ property taxes and divide by your income if it less than 42% you are qualified for a home loan. This is called a TDS (TOTAL DEBT SERVICE RATIO).
There is another formula to take out your GDS (GROSS DEBT SERVICE RATIO) in this you have to add Mortgage amount + heating bills+ property taxes + Maintenance fees (in case of Condo) divided by your income. If the result or answer comes to less than 32% you qualify for mortgage. Your mortgage amount should be 4 times of your yearly income example if you make 100K per annum you qualify for buying the home for 400k
Apply for a home loan
To apply for a home loan you need to first qualify for a home loan. There are certain conditions and guidelines set by the Government of Canada to protect the interest of the lender, borrower and to protect the economy of the country or province..
Government has set some formulas and basic rules as who can qualify for home loan and who does not quality for home loan. Some simple techniques are used.
If you are making 100k per annum you qualify for 400K worth of home that you can afford but it is not limited. There are always conditions and different situations of every person or family; this is just a basic calculation. There are many other factors come into existence if you want to buy a home that is way more than you are expecting or with in 400k you still can depending on many other factors for further details you should discuss with Amit Dhingra on 647-622-6564 to help you. He is a mortgage agent and know all the details plus he is connected to many mortgage lenders.