Christine Buemann Mortgage Broker

Why don't I qualify anymore? Mortgage lending has changed drastically over the past 5 years. We often hear of people who qualified for their mortgages a few years ago but no longer qualify for what they are looking for. Here is a recap of the most significant changes we have had over the past years: Shortened maximum amortizations. Once upon a time, you could stretch the amortization on a mortgage out to 40 years. That slowly crept back to 35, 30 and now 25. On a $250,000 at 2.69% for a 5 year fixed, that is roughly a $250 a month increase in payment. That also means you will need to earn roughly $8600 more a year in order to qualify for that same mortgage with a shortened amortization Debt ratio cutback: debt ratios have been set at 35% for GDS and 42% for TDS for quite some time. Borrowers with higher credit scores used to be able to go as high as 44% for both however several years ago, they capped the GDS at 39%. With an income of $50k and no other debts inclu

Here are a few tips to remember should you decide to keep your current home as a rental: Your property taxes will likely go up. Assuming you have bee claiming the $770 Annual homeowners grant, you can no longer claim it if you don't live in the property so you will want to budget for that and let your lender know if they withdrawing a tax portion with your mortgage payment Your home owner's insurance policy will change (and likely go up). Be sure to get quotes for the new insurance coverage as soon as possible. It's a good idea to ask your tenants to get renters insurance as well You will have to pay income tax on the income earned from your property. Since you will have to claim this income at tax time, be sure you budget for that You will likely have to pay capital gains tax when you sell the property (as it will now be an investment instead of your primary residence). You will definitely want to consult an Accountant about this If you have any questions

Are you purchasing a new home and considering what to do with your current home? Should you sell it, or maybe keep it as a rental? When it comes to financing your new purchase, every lender will treat your existing property a little differently. Most banks will want you to include the current mortgage payment, property tax and heat in your debts and will only allow you to add 50% of the rental income back to your income. As a Mortgage Broker, we have access to several lenders who use their own calculations which makes it much easier to qualify. Typically, they will use the rental income and take away the expenses as well as certain percentage for maintenance and vacancy. Any surplus is then added to your income and any deficit is added to your liabilities. Using this second method typically allows you to qualify for a much larger mortgage on your new purchase. Stay tuned next week and I will provide some tips (from personal experience) if you choose to keep your current h