Have you ever wondered exactly what factors determine your mortgage eligibility? These are some of the most common ones:
Your credit score.
Your ability to provide a down payment.
You Need To Be Able To Prove You Have Enough Income To Cover A Mortgage
The biggest thing lenders look for when determining your eligibility is to confirm that you have a secure source of income. This proof of payment can take various forms, including pay stubs, a letter from your employer, or tax returns if you're self-employed.
In addition, you also need to prove you have enough income to cover not only the mortgage but other expenses associated with buying a house, such as property taxes and utilities.
Lenders Look At Your Credit Score
Want to increase your credit score? Make sure you pay your bills on time and ensure you have a few different types of credit, such as more than one credit card.
You Must Be Able To Provide A Down Payment
The minimum down payment you have to be able to afford a house varies. It is as follows:
Five percent of the purchase price if it's $500,000 or less.
For houses that are more than $500,000 but less than 1 million dollars – five percent of the first $500,000 of the purchase price and ten percent of the rest.
Twenty percent of the purchase price if the house costs more than 1 million dollars.
To protect themselves, lenders will also insist you buy mortgage loan insurance if you have less than a twenty percent down payment.
Use Our Ontario Mortgage Qualification Calculator To Determine What You Can Afford
Do you want to buy a home but need to figure out how much of a mortgage you can afford? Our mortgage qualification calculator can help you determine what size of mortgage you can afford for an Ontario home.
To use our calculator, you need to provide information such as the asking price, the interest rate of the mortgage, the amortization period, and the estimated property taxes.
Our calculator will then tell you a variety of information you need to know to make an informed decision about whether you can afford an Ontario house, including the expected monthly mortgage payments and insurance premiums.