Month: March 2018
So you want to buy a new car. Maybe you’re excited to ditch public transportation and get your own set of wheels. Maybe you landed an amazing new job and want to treat yourself to an upgrade because your current odometer reading is over 400k. I hate to rain on your parade, but you may want to avoid financing or leasing a car if you’re also thinking about purchasing a property in the next few years.
When it comes to your mortgage application one of the most important things to prove in 2018 and going forward is your ability to “service” or pay for your debt. Of course your credit score and size of down payment will also influence your approval, but not as much as your debt service level. Total Debt Service (TDS) and Gross Debt Service (GDS) are ratios calculated on every application, and must be below a certain percentage for an application to be approved. Current regulations states that with good credit you’re allowed a TDS of up to 44%. In other words, 44 cents from every dollar you earn (before taxes) can go towards paying or “serving” your debt.
The latest “Stress Tests” that came into effect on January 1st, 2018 is another way that the regulators want you to further prove that you would be able to make your payments. The Bank of Canada benchmark rate (or contract rate) plus 2% is used in your mortgage application calculations, even though the rate you would actually pay may be much lower. The end result is a higher TDS ratio which either requires more income to service it, or a lower mortgage amount in order to get an approval.
Now back to that fancy SUV you were eyeing out. Did you know that a $475 monthly car lease or finance payment will cost you approximately $100,000 in mortgage buying power? That could be the difference between a house you will like and a house you will love. It could also be the difference between getting approved and not getting approved. This is because your car payment, along with all your other debts, are calculated into your TDS. As you can see, any amount of liabilities will make your application a little tougher to fund.
Thinking about buying a house? Also need a car? Pay cash, use public transit, or share a car until you move into your house, and then finance a new car.
If you have any questions about this blog post or any other mortgage issues, feel free to reach out.
Antonio Del Pellaro
Tyandaga is tucked away under the Niagara Escarpment in the north-west corner of Burlington, Ontario. This community was established in the early 1970’s originally, but added many new subdivisions within its current boundaries. Tyandaga was named after Joseph Brant (Thayendanegea), who was a chief of the Mohawk tribe in the 1700s, and, an original settler in the Burlington area.
The area of Tyandaga is considered a very desirable family area that is comprised of mostly single detached homes, but you can find semi-detached and condos as well as some rental properties. Many of the homes have large lots, back onto ravines with creeks, and are in a cozy setting but close to the downtown area, shopping, and all major highways.(403, QEW, 407) Also, within a 5 minute drive are 2 Go Stations and VIA Rail services.
There is an abundance of elementary schools in the catchment area:
Clarksdale Public School – JK–Grade 6
Paul A. Fisher Public School – JK-Grade 6
Burlington Central School – Grade 7 & 8
St. Gabriel Catholic School – Grade 8
M.M. Robinson High School – Grade 9-12
Fern Hill School – JK-Grade 8.
*** For more information about curriculum and boundaries contact the 2 School Boards:
Burlington and Tyandaga are well known for its shopping and restaurants. Shopping can be found at the Power Centre including Sobeys Extra, Costco, Marshalls, Indigo, Milestones, Shoeless Joes, LA Fitness, and many others. The Power Centre also has the Silver City Cinemas, Best Buy and Pet Smart!
The 2 main parks in Tyandaga are located in the north section and are comprised of:
- City View Park -this state-of-the-art park has artificial fields with night-time lighting and great views of the escarpment and beyond.
- Kerncliff Park-situated under the escarpment, this area affords opportunities of hiking, boardwalks and even some wetlands with connections to the Bruce Trail!
If you would like more information on Tyandaga please call/text/email me! I am very knowledgeable on all neighbourhoods within Tyandaga.
Looking to move into the Tyandaga area??? Tyandaga homes for sale
“Let Me Move You!”
Keller Williams Edge Realty
3027 Harvester Road, Suite 105,
Burlington, Ontario. L7N 3G7