FIRST TIME HOME BUYER - How to Qualify for More Mortgage

   First Time Home Buyers typically want to maximize their buying power and are looking to purchase the best home that they can afford. At the core of mortgage qualification is a mathematical formula. Essentially your total debt payments divided by your gross income.

If you find yourself not qualifying for the mortgage you want then you might be carrying too much other debt (ie: car loans, credit cards, student loans, etc.) which is limiting your mortgage amount. Keep in mind that it is your monthly debt payment amount that is used in the calculation. So, either find a way to lower the payment amount or pay off that debt. The qualification calculation does allow for some other debts without hurting your qualification amount, but too much debt can really lower the mortgage amount that you qualify for.

Another option is to increase your income to help qualify for more of a mortgage. Not all lenders are the same and some lenders accept other sources of income such as child tax benefit or rental income. You can also look to add another person to the mortgage that has good income to debt ratio. It is common to add a parent to the mortgage and include their income and their debts to the calculation. You have to include both their income and debts, so if someone has high debts relative to their income then they are not a good candidate to add to the mortgage application.

Finally, if you are able to put more than 20% down payment, then you can use a 30-year amortization which will allow you to qualify for more money. Most first time home buyers do not have 20% down, but if you can get a gift from an immediate family member then you can use this option. With less than 20% down payment, the maximum amortization is 25-years.

Contact Us
For more information on how to qualify for more of a mortgage, contact your local Ajax Mortgage Broker, Sean Stewart at 905-427-9596 or sean@seanastewart.com