Thinking of starting the house hunting process??

Did you know that a vehicle payment can significantly effect your ability to qualify for a mortgage!?

Buy the house and THEN the car!

Federal mortgage guidelines require that your income can handle all of your debts (that you currently have) PLUS the new mortgage payment, property taxes and heat payment.

The NEW mortgage rules are more strict and rigid than ever – and require you to be very conscience of what your debt load looks like.

If you have a car payment of $500/m – that is $500 a month less that can go towards your mortgage payment and expenses.

Did you know that if you have a BIWEEKLY car payment – we have to use a HIGHER payment (monthly). A biweekly payment comes out of your account every 2 weeks. This means you make a payment 26 times in a year.

If your car payment is $200 biweekly – that does not mean you are paying $400/m…. it means you are paying $433.33/m. This is the number the mortgage company will use when calculating your debt.

Example:

If you have a car payment of $433/month

AND assuming you have good to great credit

Income is $50,000/year

Max Purchase Price $180,000.00

5% down=$9,000.00

IF you do NOT have a car payment (same good credit, same income)

Max Purchase Price $225,000.00

5% down=$11,250.00

That is a $45,000.00 difference in borrowing power and may allow you to purchase the type of home in the neighborhood you are hoping to live in!

After you have taken possession of your home – you can easily qualify for a Car Loan with a number of banks or dealerships. Qualifying for a home (mortgage) is a much different process with much stricter rules.

KEEP IN MIND: Even with strong income, depending on the area you wish to buy a home- a vehicle payment can seriously and negatively effect your ability to qualify for the house you want to buy.

Buy the house and THEN the car!

Spread the word and tell your friends.

Many FIRST TIME HOME BUYERS do not know this.

Your paid off “middle of the road” vehicle is not looking so bad now is it????

Call us today with any mortgage questions! 306.933.3386

OR APPLY ONLINE and we will be in touch with you immediately!

Tammy Wandzura: Saskatoon Mortgage Broker AMP
Brydon Wandzura: Administrative Support & Client Care Specialist