Salary vs House Prices

---

What house price can you afford ?

How much mortgage can you afford ?  

What formulas is used for mortgage amount assessment?

Article Summary

• Don’t focus on salary, rather it’s your income versus debt that matters
• To understand affordability look at the savings left over every month after your salary is received and all monthly bills paid
• (Debt-to-Income) DTI ratio is one of the most important qualification metrics that a lender will use 
• DTI is needed to estimate maximum house price vs income
• Your down payment affects the maximum price for your new house

HOW MUCH SALARY DO YOU NEED TO BUY A HOUSE

A simple calculation is required involving: total income, total debt and DTI ratio.
A Mortgage Agent can provide this information to you immediately.

IT’S not about SALARY but rather SALARY vs DEBT

• While a bank does care if you have a salary; they care MORE about your salary vs your debt
• Have you ever heard someone mention mortgage terms like stress test ratio, gross debt service ratio (GDS). These are metrics used by lenders to calculate a borrower’s maximum mortgage amount
• A bank’s major concern is whether or not you can financially handle the monthly mortgage payments. Will you miss any payments?  What is the probability that you will?
• Remember that “salary” can be a combination of all salaries from all owners of the property

– Enter cell #
– we’ll text you 3 short questions
– then we send the salary target

What is the Debt-to-Income ratio (DTI) that lenders use?
What does a lender consider as debt?

• This ratio is used by lenders to determine the maximum amount of mortgage you qualify for
• The Debt-to-Income ratio is calculated by dividing your total monthly debt payments by your monthly income
• The DTI ratio includes debt such as
  • student loans 
  • car loans/leases 
  • credit card debt 
  • lines of credit 
  • alimony payments

Your Down payment will affect your maximum house price

• The maximum price you can pay for a house is based on your down payment + approved maximum mortgage
• The lender will confirm your maximum mortgage amount based on the DTI ratio
• Your down payment can come from your own savings, RRSPs, First-Time home buyer’s account, family cash-gift. Remember to keep records of where the cash came from as the lender will request this documentation

Summary

There are a lot of moving parts to figuring out how much income you need to buy a house in your city.
* How big of a house do you want?
* Do you want a fixer-upper?
* Will you buy whatever you can afford?
* Do you have the cash for the down payment?
* How much debt do you have – will these payments affect the mortgage size you need?

Talk to a Mortgage Agent.
We can break down all these issues into simple questions and answers. We’ll provide estimates, goals and a strategy to help you achieve your property goals.

ESTIMATE YOUR SALARY TARGET
Jason Wodlinger Mortgages provides estimates and explains:

• everything about the mortgage qualification process
• the maximum mortgage amount you will qualify for
• how a lender would evaluate your situation
• the probability that you will qualify for a mortgage
• how to increase the probability that you will be approved for a mortgage
• what your mortgage interest rate will be
• what your total monthly mortgage payments will be
• explain the cost related to mortgage insurance for down-payments less than 80%
• the exact calculated result of your Debt-to-Income ratio

Let’s Connect
30 minute no obligation call

**************************
Click heading to collapse paragraphs below:
**************************