Not that I recommend it as a wise thing to do......but,
According to the mortgage calculator at Realtor.ca, with a $32,000 income you would qualify for a $190,000 mortgage if the taxes are $250 a month, heating costs $150 a month, there are no condo fees, based on a 3% interest rate, and you have no debt payments.
If the home is a condo with fees, or if you have any debt payments, or taxes, heating or interest costs are higher than the above listed amounts, the mortgage qualified for would be considerably less.
The CMHC fee is added to the mortgage as well, and may put the price above an eligible mortgage.
If you could negotiate the sale price of the home lower, it would be helpful to what you want to do.
If you do apply at a number of financial institutions, you should do them all at once. If the credit inquiries are at the same time they are grouped together and considered as "one hit" to your credit.
If they are spread out over time, they would each be a credit inquiry and a high number of them would lower your credit score.
Last edited by sags; 2017-01-09 at 04:23 AM.
Someone planted a tree a long time ago so I can sit in the shade.
It was good of you to apologize - thank you!
So here is your personalized loan consultation.....I manage a mortgage underwriting center for a large lender so this is as accurate as it can get.
Income: You need at least 2 years of income stability since your employment is part-time. Seeing as your bank already identified that, they would be correct. But lets go through the numbers you provided anyways assuming you do have the 2 years. Qualifying income on $32000 gross per year is $2667/mth.
Down-Payment: Although you did not specify, we will assume the minimum required which is 5%. Financing a mortgage at 95% of the $200k purchase price is $190,000 which you will need to add mortgage insurance of 3.60% so total loan is $196,840. Regardless the interest rate, you will need to qualify with a benchmark rate of 4.64%. Qualifying payment would be $1105/mth. Actual payment would be about $915 but for qualification purposes, we need to use $1105.
Debts: Add up all your loans (student loan, credit card balances, car loans, retail cards, etc). I stress this because many people forget or convince themselves they have less debt. Assuming $44,000 is the ONLY debt you have, the qualifying payment for this is 1%, so $440/mth. If the loans are already converted to revolving credit with a set interest rate, you will need to qualify with a 3% payment. But lets assume 1%. (All other credit card debt is 3%)
Utilities: You will need to consider the actual amount for property taxes. If its a new construction, you consider 1%. So lets consider $2000 ($167/mth) and heating is also factored in at a minimum of $100/mth. If condo fees apply, then you need to consider them. If unknown, we'll use $100/mth.
Your GDS (Gross Debt Service) level must not exceed 39% and your TDS (Total Debt Service) level not exceed 44%.
Qualifying Income: $2667
GDS debt amount: $1472 ($1105+$167+$100+$100)
TDS debt amount: $1912 ($1105+$167+$100+$100+$440)
GDS = 55% ($1472 / $2667)
TDS = 71% ($1912 / $2667)
It is clear you do not qualify - by far. What the GDS tells us is that even if you had zero debts, you would not qualify for this loan. Your incomes are too low and lack stability. At these ratios, I can tell you that even a higher down-payment would not help since the payment does not go that much lower and would not reduce your ratios enough.
Not sure how you are affording your current rent of $1300 but you must be either living a very frugal life or you are regularly dipping into your student loans to compensate.
My advise to you is to finish school, get full time jobs, pay off your debts and put as much money aside as possible in order to accumulate at least 20% down payment. Carrying such large student loans along with a mortgage is a recipe for financial disaster. I see it way too often and 99% of such profiles never recover to financial freedom. Everyone is too eager to get a home that they do so at any cost. Not a wise decision if you ask me.
Hope this clarifies your question.
Last edited by Mortgage u/w; 2017-01-10 at 11:04 AM.
wow! Thank you so much! This gave me a good idea where we stand and where is that qualifying threshold!
I think a tuition rebate is in order.
All I can recommend is that you stay away from condos. The monthly fees are one thing, but if big maintenance is needed - like refinishing the parking lot - you may be required to help shoulder those costs too. This happened to a friend of mine in British Columbia. The added costs were nearly unmanageable for her.