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Obleman Mortgages Mortgage Pre-Approval - Obleman Mortgages

Mortgage Pre-Approval

“Confidence comes from being prepared”

John Wooden

First Steps

If you are considering a new home purchase one of the best places to start is with a mortgage pre-approval. A pre-approval is simply the process of evaluating your current situation. By reviewing things like your credit, liabilities, employment and down payment you will have a very good idea of what you can comfortable afford on your dream home.

My role is to ask all of the right questions, to understand your goals, and provide an option to get you there. Even though obtaining a mortgage is likely one of the biggest decisions you will make, the pre-approval process is quite simple. I’ll ask questions relating to your:

  • Future Goals
  • Income
  • Assets
  • Liabilities
  • Down Payment

I will also ask for your permission to run a credit check (through Equifax Canada).

All of the data will be taken into consideration within lender guidelines regarding debt servicing ratios. These ratios are used to determine the mortgage amount you qualify for. Two of the ratios that lenders use are GDS and TDS.

What are GDS and TDS?

Lenders review your mortgage application to determine if it is a fit within lending guidelines. Two areas of concern are the gross debt servicing and total debt servicing ratios. With a good credit score (>680) the following applies:

Gross Debt Servicing (GDS)

GDS is the amount of your gross income that can be used as a shelter payment. This is calculated buy adding principal + interest + Taxes + heating expenses and 1/2 of monthly condo fees (if applicable) divided by your total gross income. Lenders like to see your GDS under 39% of your gross annual income.

Total Debt Servicing (TDS)

TDS is used to determine how much of your household income is spent on total shelter costs and existing debt repayment. This is calculated buy adding principal + interest + Taxes + heating expenses and 1/2 of monthly condo fees (if applicable) + debt obligations divided by your gross annual income.

Lenders will also review your income and down payment as part of the mortgage pre-approval application. To learn more specifics regarding these qualifiers, check out these pages next. Down Payment, Credit and Employment Income. A mortgage pre-approval is where it all starts. A review of your current goals and financial situation, with the information you provide I am able to give you a very good idea of mortgage qualifying numbers. From here, your dreams can turn into reality.