MYLENE LIM Licensed Mortgage Specialist

For most of us , we aim to live in our own home at some point in our lives . To have the stability and knowledge that as long as we take care of our financial obligations , we can put roots in one place . But in today ’ s market , becoming a homeowner may seem daunting and complex . To give a simplified guide on how to determine if you may qualify for a mortgage , I ’ ve summarized some key points to consider : 1 ) Income Lenders would like to see that you are earning enough to pay not only for your mortgage , but also for property tax , heating , strata fees ( if applicable ), and your other financial obligations such as credit cards , car loan , line of credit , student loan , etc . As a general rule of thumb , lenders consider that approximately 44 % of your gross income should get aside to pay for all your financial obligations . This will leave you extra funds to take care of living expenses such as groceries , tuitions , gas , entertainment , etc .

Lenders would also like to see that your income is steady and can be relied on to pay for your obligations . For this , they look at how long you have been employed and what your guaranteed hours are . Having a

full-time permanent employment is a plus . However , even part-time employment will still be considered as long as you can prove that you ’ ve been earning a steady income for the last two years . Self-employed income is also considered if there ’ s a twoyear history to rely on . Aside from the above sources of income , some lenders may consider other income such as pensions , rentals , and child tax benefits . 2 ) Credit Score Lenders look at your credit report to determine the likelihood of you paying your mortgage as agreed . They look at how much debt you already have , what is the balance you carry over every month , do you always pay on time or are delinquent in your paying habits , have you ever been in a consumer proposal or bankruptcy . Your score would determine what kind of mortgage product as well as the interest rate you might get . Lenders will determine the risk of loaning to you and will package the mortgage accordingly . 3 ) Down payment The minimum down payment for an owner occupied property is 5 % for property value of up to $ 500,000 , 10 % for property value up to just below a 1M and 20 % for over a million . The down payment is computed on a sliding scale . For example , if the property

you ’ re interested in is worth $ 800,000 , that means that for the first $ 500,000 , the minimum down payment is $ 25,000 ( 5 %) and the remaining $ 300,000 will be at 10 %, which will be 30,000 . Therefore your minimum down payment will be 55,000 .

Down payment may come from your own funds or gifted by direct family members ( parents , siblings or children ). Lenders generally would like to see the full down payment amount in your bank account at least 90 days prior to closing date . For gifted down payment , they would like to see the money in your bank account at least a month prior to closing . For gifted down payment coming from overseas , lenders may request documentation of money source and remittance . 4 ) Property Lenders would like to ensure that the property you are purchasing is sound . They normally require an appraisal done on the property to determine the market value of the property ; the appraisal cost may be shouldered by you , depending on the mortgage product you are getting . For condos and townhouses , some of the documents they will review are the property strata documents to determine how healthy the financial situation of the strata is , depreciation report ( if available ) for the physical condition of the property and expected

repair and maintenance in the future , and minutes of meetings .

Homeownership is the biggest investment and consequently the biggest liability you may have . Work with a licensed mortgage professional whose industry expertise can benefit you in determining the best options available for your particular need . It generally doesn ’ t cost you anything to discuss , review and if applicable , arrange your mortgage for you . ●

For more information , please feel free to contact me :

Cel : 604 783 9097 / Email : mylene . mortgage @ gmail . com / Web : www . MyleneLim . ca / FB : Mylene Lim

604-588-6397