"With over 26 years selling Markham-area homes, John Procenko Real Estate has the experience to get your home sold. Visit http://www.procenko.com/ for current listings in the Markham area. They are located at 165 Main Street North Markham, ON L3P 1Y3‎ (905) 472-7155. "

1. Tips to Qualify for a
Home Loan

2. Introduction
It’s an understood rule of society that in order to buy a
home, you must take out a home loan or mortgage.
However, to get to that point you must first qualify for the
loan. Not everyone can march into a lending institution and
just get a mortgage.

3. Introduction
Anyone who wants a home loan for any type of home must
meet the requirements of the lending institution and follow
some important steps to get the home they want. Here is
some information and tips to help you get the home loan
you want.

4. What Can You Afford?
According to the Canada Mortgage and Housing
Corporation, figuring out how much you can afford is the
first step to qualifying for a home loan. All it takes is a few
basic calculations to help you determine what amount will
fit into your current lifestyle.

5. What Can You Afford?
The first number that’s figured out is your Gross Debt
Service, or GDS. This determines the maximum amount of
home-relayed expenses you can afford to pay on a monthly
basis. This number shouldn’t be higher than 32 percent of
your gross monthly household income.
The second calculation is called the Total Debt Service, or
TDS. This estimates the maximum debt load that you’re
able to carry each month, with the magic number being
less than 40 percent of your gross monthly household
income.

6. Important Factors
Select Mortgage Corporation states that four main factors
are involved when attempting to qualify for a mortgage in
Canada.
•Income Stability – Anyone who has applied for a home loan in the past
knows that a stable income is key. Whether you are looking for
something in the higher-end Markham, Ontario real estate market, or
something more modest, you need a stable income. Don’t be
surprised if your lender asks for pay stubs or a couple years of tax
assessments.

7. Important Factors
• Credit History – Most lenders want to see a credit score of 680 or
higher, and if yours isn’t ideal you may be eligible for programs to
help build it back up again. Every lender or broker will take a look at
your credit history as part of the qualification process.
• Property Choice – As Select Mortgage explains, your choice of
property plays a role because it is basically the lender’s security
against the amount of the loan. Lenders want to know that the
property is worth the loan amount, and that it could sell quickly if it
ever came to that.

8. Important Factors
• Down Payment – In today’s market, it isn’t always necessary to
have a down payment, but in certain situations it is a requirement to
qualify for the mortgage. In a ‘conventional’ mortgage, 20 percent is
the normal amount and the lender won’t take out default insurance.

9. The Pre-Approval Process
Most prospective homeowners these days get pre-
approved for their mortgage before they go out looking for
a home. It ends up saving a lot of time, and again, whether
you’re in the Markham, Ontario real estate market or a
small town in Northern Ontario the concept is the same.
Essentially, being pre-approved means that you have gone
through the qualifying steps and you know how much of a
loan you can get before you look for a home, rather than
after you find one you like.

10. The Pre-Approval Process
According to the Financial Consumer Agency of Canada,
with a pre-approval you can:
• Lock in an interest rate before you find a house in case they rise in
the meantime.
• Figure out your mortgage payments ahead of time and work them into
your budget.
• Only look for homes that you know you can afford.

11. The Pre-Approval Process
It is important to keep in mind that the amount you are pre-
approved for is the maximum and you don’t necessarily
have to take on a mortgage that high. It’s also important to
remember that the deal will still have to be approved,
because even though you’ve been approved for an amount,
the lender will want to know the property matches up.

12. The Pre-Approval Process
Your real estate agent will often help you get started in the
pre-approval process, but the common places to look
include:
• Banks
• Credit Unions
• Mortgage Companies
• Insurance Companies
• Trust Companies
Following all of the tips and going through the pre-approval
process will put you in position to buy the home you want,
and start living the life you want to live.

13. Advice
With over 26 years selling Markham-area homes,
John Procenko Real Estate has the experience to get your
home sold.
Visit http://www.procenko.com/ for current listings in the
Markham area. They are located at 165 Main Street North
Markham, ON L3P 1Y3 (905) 472-7155.