This is the first step before you start searching for your Dream Home “how much mortgage amount you will be qualifying for or how much mortgage I can afford?” This is based on your income and monthly expenses (car payment, Credit cards or any other loans) and other expenses related to your real estate like Property taxes, Heat, Insurances etc.
The higher your affordability is, the higher will be the purchase price is.
Determine your family income, down payment, and monthly debts plus “Will be” expenses for your new property. You will be able to get a reasonable estimate amount.
To estimate this amount, Banks use Gross Debt Service (GDS) and Total Debt Service (TDS) for the ratios to the mortgage amount.
Gross Debt service describes the percentage of your family income, that includes your real estate cost like mortgage payments, Condo fee, Property taxes and utilities. It should be under 39% of your Pretax family income.
Total debt service describes the percentage of your family income that includes your real estate cost and your monthly debts (like a phone bill, Student loan, Credit card or car payment). It should be less than 44% of your pretax family income.
You can find a “Mortgage Affordability calculator on our website that will give you the estimated mortgage amount you will qualify or you can contact “Mortgage Diligent” and Team will assist you.
COVID-19 Update: We're here for you. These are uncertain times but one thing that is certain is our commitment to you. As an online business, we're set up to help you remotely so you can still take care of your mortgage decisions.