16 | Consumer Guide 2015 mbabc.ca
%
rate mortgage, can advise you about when
to lock in to a fixed rate. And mortgage
brokers are a wealth of information should
you have questions about paying off your
mortgage faster, mitigating credit history
issues, or purchasing holiday, investment or
commercial properties.
Your mortgage broker is also your first
call should you consider renovating your
home or purchasing an additional vehicle
and want to take out a second mortgage
on your home to finance it, says Brar.
Your mortgage broker can also help you
refinance your home to consolidate your
debts and or simply take advantage of
lower interest rates.
Essentially, explains Brar, your mortgage
broker is a resource you and your family
can rely on for both financial advice and
financing assistance. "Once you get to
know that person, you can trust them, and,
similar to using a family physician, you
develop a relationship with your mortgage
broker that lasts a lifetime."
•
Calculating your debt service ratio
One of the ways lenders calculate how much they're willing
to lend an applicant is by measuring how much of your monthly
income will go toward paying off your debt, and your mortgage
broker can help you calculate this.
Your gross debt service ratio (GDS) is the percentage of
your gross monthly income that will go toward monthly housing
payments, including mortgage payments (principal and interest),
property taxes, heating expenses and, if applicable, half your
condo fees. Most lenders will require your GDS to be no more
than 32 per cent – in other words, your monthly housing costs
should comprise no more than one-third of your monthly income.
Your total debt service ratio (TDS) includes not just your housing
costs, but any other monthly debt obligations such as car loans,
student loans or credit card balances. To satisfy most lenders,
you'll need a TDS of 40 per cent or less, though some lenders are
as stringent as 37 per cent.
Helping you choose
the right lender
for your situation
is one of the key
advantages of
working with a
mortgage broker.
