Find Out What Amount You Would Qualify For?
When searching for a new home, the first step is to figure out how much you can afford. Obtaining your mortgage pre-approval is an important part of setting your budget.
You also need to determine if you have enough cash resources to purchase a home. The cash required is derived from the down payment put towards the purchase price, as well as the closing costs that must be incurred to complete the purchase. Taken together, understanding how large a mortgage you can afford to borrow and the cash requirements involved is helpful for calculating mortgage payments for Halifax homes, which will assist you in determining what kind of home you should be on the lookout for.
Understanding Mortgage Affordability in Halifax: Key Factors and Ratios for Home Buyers
Many factors will affect the maximum mortgage you can afford to borrow, including the household income of the applicants purchasing the home, the personal monthly expenses of those applicants (debt: car payments, credit expenses, etc.), and the expenses associated with owning a home (property taxes, condo fees, and heating costs, etc.)
Lenders look at two ratios when determining the mortgage amount, you qualify for, which generally indicate how much you can afford. These ratios are called the Gross Debt Service (GDS) ratio and Total Debt Service (TDS) ratio. They consider your income, monthly housing costs, and overall debt load. Lenders will also take into effect your current credit score and your credit history, which are crucial in the Halifax home loan eligibility check.
There is a rule of thumb about how much you can afford, based on the calculations your mortgage provider will make. The general rule of thumb is that you can afford a mortgage where your monthly housing costs are no more than 32% of your gross household income, and where your total debt load (including housing costs) is no more than 40% of your gross household income. This rule is based on your debt service ratios and is a key consideration in understanding home affordability in Halifax.
Note: These numbers can and have changed in the past, so it is important to verify the current percentage being used with your mortgage specialist.
Some people like to air on the side of caution and purchase a home for less than their pre-approval amount. It can be comforting to know that you have extra cash flow at the end of the month in case of emergencies. You are in control of what price point you would like to focus your search on.
To get a rough idea of what you could afford, you can use the affordability calculator
Note: This is just an estimate and it is “not” considered a true pre-approval. You will still need to apply with the mortgage specialist to be 100% confident in your approval amount and rate details.
Did you know?
1. A pre-approval is free and there is no obligation to purchase a house.
2. The bank can lock in a rate for you, such that if the rates increase you are protected by that increase.
Ready to Begin Your Journey to Homeownership in Halifax? Let’s Start Your Pre-Approval Process Now!
Take the first step towards your dream home today! Connect with me, and I’ll guide you through the seamless process of getting pre-approved for a mortgage. Don’t hesitate to call me or visit our homepage for more information on how we can assist you in finding the perfect home in Halifax.
For immediate assistance, please fill out the contact form below. It’s a quick and easy way to get started, and I’ll be in touch to connect you with a trusted mortgage specialist who can tailor the pre-approval process to your unique needs. Let’s make your home buying journey a success together!
Hello there! I’m Alisha Caillie-Fleet, a seasoned Real Estate Agent located in Halifax. With a sales history dating back to 2014 across Nova Scotia and Ontario, I bring a wealth of expertise to the table. My specialization includes residential properties, investment opportunities, and military relocations. I’ve wholeheartedly committed myself to honing my skills to ensure that your experience of buying or selling a home is seamless and free of stress.
Being a military spouse, I also have personal insight into the challenges military families are confronted with. As a result, I’ve developed a tailored approach to cater to the unique demands of the DND moving process.
Let’s establish a connection and have a conversation about your real estate goals!
Alisha Caillie-Fleet – Realty in Nova Scotia | (902) 489-4911 | 1959 Upper Water St #1301, Halifax, NS B3J 3N2 | alishasellshfx@gmail.com | BGRS Approved