Joan Manuel - Royal LePage Sales Representative

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Mortgage

SPEND TOO MUCH:

Spend too much and you end up house rich and cash poor. If any unexpected expenses pop up, and they will, you may find yourself under a great deal of pressure just to make ends meet. Professional lenders are very friendly and accommodating when they are looking for your business. Miss a few mortgage payments and your friendly lender can become a very firm collection agent with the full power of the law behind them.

SPEND TOO LITTLE:

Spend too little and you end up with a home that is just too small or just not right. Now it becomes an expensive proposition to find another home, sell your current 'too small, not just right' home and move your family and all your belongings to another home.

This step is a very important one and you should take as much time as necessary to work through the amount of money to spend in order to acquire the right home, at the right price, for you. This issue is a very personal one. It requires careful thought well before you even look at your first home.

Of all four costs, the mortgage is obviously the biggest and the most important. The size of your mortgage will determine your monthly carrying costs. Because of its importance, the mortgage is the first cost we are going to consider.

Professional lenders will look at three factors in making a decision on how much mortgage they will finance. Their major concern is your current income and how much of that income is available to keep your monthly payments up to date. A buyer with a high income may not qualify, if they have other monthly commitments such as a large car payment or large commitments on credit cards, charge accounts, college loans, etc.

The three factors that the professional lenders will consider are as follows:

Your Gross Debt Service Ratio (GDSR),
Your Total Debt Service Ratio (TDSR) and
Your Credit Record

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NOTE: To obtain a copy of the book for yourself please do not hesitate to contact Joan Manuel.
If you would like to print out a copy of the provided portion of chapter 2 for your own reference please refer to the printable version.

Last Update: March 14, 2000