Kirby Cox's Calgary Real Estate Blog

When it comes to purchasing power, the three most important factors are your income, debts and down payment. Any one of these can greatly impact the amount of mortgage you qualify for. Lenders are primarily concerned that housing expenses not exceed a certain percentage (28% - 32%) of the homeowner's gross monthly income. Housing expenses include monthly mortgage principal, interest payments, property taxes, condo fees, utilities and homeowner’s insurance.

Here's some solutions to some common debt and down payment problems:

DEBT

• Consolidate your debts by taking out one loan and paying off your bills with the money.
• Pay off long-term debts by using some of your cash and making a lower down payment.
• Pay off long-term debt by selling another asset and using the cash generated from that sale.

CREDIT

• It is a good practice for you to request the details of your credit rating from the credit agencies periodically. This will help you to understand your rating and ensure the credit agencies have the correct information. To obtain a copy of your credit bureau report, you may contact the credit bureau agencies directly:
  
  • Equifax
  • TransUnion Canada
• Repair your credit file by contacting creditors and requesting that negative information be removed.
• Pay off outstanding judgements, liens and collections.
• Re-establish a good credit record.

DOWN PAYMENT

• Ask the seller to carry and second mortgage.
• Sell or borrow against another asset.
• Borrow against or cash out your RRSP - but consider the tax implications.
• Consider financing options that offer lower down payments and help with closing costs.

If you're looking at purchasing a home and wonder where you stand right now in terms of buying power, by all means contact us for some guidance, we're happy to help.