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What can you Afford?
You will qualify for a mortgage based on the size of payment that you can handle comfortably considering your current financial situation. You are allowed to borrow an amount such that the monthly payment not exceed 32% of your gross income. Further all debt service including mortgage, car payments, credit card payments, alimony/child support etc may not exceed 40% of your gross income.
For mortgage calculation purposes income includes all regular income from employment or self-employed or business income supported by documentation (balance sheets) for both you and your spouse, as well as investment income, including rents from other properties and from this property, providing that the rental accomodation is legal. This is gross income - before taxes. Monthly Payments include all charge cards, Visa, Mastercard, Amex etc and also department stores, oil company cards etc. Also included are car payments and any other regular payment such as child support or alimony.
Mortage Calculator
Consider first applying for a pre-approved mortgage. A pre-approved mortgage certificate guarantees a specific mortgage (amount and interest rate) for a time period of 30-120 days, subject to property appraisal. Having your financing in place helps you focus your house-hunting on PEI properties and real estate that you know you can afford. A pre-approved mortgage may also give you an advantage as vendors know you are serious and therefore your offer may be more readily accepted, since it doesnt depend on securing financing. If you are wondering if you can afford a home, call on Mike to help. Allow him to connect you with professional mortgage brokers who may be able to help you.
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Mike Henwood,
Royal LePage Country Estates
630 Water St., E,
Summerside, PEI C1N 4H7
Bus: (902) 436-9151
Cell: (902) 439-4760
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INTRODUCTION