by Ken Murphy
on Thursday, October 25th, 2018 at 9:31am.
A home purchase is one of the largest assets and the biggest debt that a person will have. If this is your first time obtaining mortgage, then there are a few things that you need to know about what is required to qualify.
1) Credit History: How is your current credit and how has it been in the past? Your financial institution will look at your rating, and that everything is in good standing. If you are able to manage your debt, then it reflects on your ability to manage house payments.
2) Debt Load: What are your liabilities? How much debt do you have? Your financial institution will look at the amount that you owe compared to the amount that you earn. Your debts should not exceed 40 to 42 % of your gross income, and your housing costs should not exceed 30 to 32% of your gross income.
3) Income and Job Stability: How long have you been with your current job? What is your income? Your financial institution will need to verify your pay via recent pay stubs, plus may request a letter from your employer further verifying your income and employment status.
4) Down payment: You will need a down payment of at least 20%, and will need to provide information on where your down payment will be coming from. Will you be withdrawing from RRSPs or other investments? Or do you have other savings that you will be using? Will you require mortgage insurance through CMHC?