Need Help Detirmining Affordibility of a Home

[SunniSunShine]

Hello,

My Girlfriend and I were wanting to buy a townhouse together and we have our sights set on one for $330,000.

We stand to make $100,000 or more this year combined.

We both started new positions this year where our wages have grown a considerable amount over the prior years.

We are both 20.

We applied for a mortgage a couple months back and we were unable to be approved for a large amount because they were basing our Gross Monthly Income on that of 2004-2005. We we're both fresh out of high school in 04 and neither of us were working very much so the fact that it was based on previous years T4s really puts a strain on approval for us.

I was just wondering if with a letter from my employer, (currently have one) and proof with pay stubs if i could increase the amount we can be approved for.

Also i know there are a couple mortgage brokers out there on beyond, so if you could help out in anyway that would be greatly appreciated.

Thank you very much

[TC2002]

That's really strange. When I got approved for my mortgage last month, it was based on my income now, and my T4 in 2006. I hope you go to another broker to get a quote. That's bizarre.

[nest79]

you need to go get a mortgage broker......home loans canada will help you. if you need one , i can refer you one......

[JRSC00LUDE]

From my experience, when applying for something like that after moving to a higher paying job, a letter from employer confirming permanent employment and wage is all it takes.

If they aren't willing to do that, I would suggest looking at a different lender.

[QuasarCav]

For comparisons sake we were approved for around 150K with a combined income of only 45K a few years ago.

[SunniSunShine]

Originally posted by TC2002
That's really strange. When I got approved for my mortgage last month, it was based on my income now, and my T4 in 2006. I hope you go to another broker to get a quote. That's bizarre.

i found it quite odd as well as very irratating!

I'm still not sure if we can be approved based on 06 as i have Doubled my income from 28 up to around 65k.

Hopefully there is a broker who can work their magic for us

[Godfuader]

Since there is a significant difference between your previous and current income, all you need in employment/income verfication (letter from company plus last 3 paystubs). If your credit history is decent, it should not be that hard. Nowadays, you can get 100% financing due to inflated real estate, so there really should not be many obstacles. I'm in transition between two companies, so don't have my lending limits now, or would have helped you out. Definately shop around.

[SunniSunShine]

Originally posted by nest79
you need to go get a mortgage broker......home loans canada will help you. if you need one , i can refer you one......

Sure if you dont mind please do.

We had a mortgage broker, but we were jumping through too many hoops to be approved for such a small amount, he sounded as young as i was, so maybe he didnt have very much pull in the industry yet.

I can honestly say we were very discouraged when we were given the figure we got from the lender and the interest rate.

I also forgot to mention, we were wanting to do 100% financing, although if worse comes to worse we may be able to place a small down payment.

[SunniSunShine]

Originally posted by Godfuader
Since there is a significant difference between your previous and current income, all you need in employment/income verfication (letter from company plus last 3 paystubs). If your credit history is decent, it should not be that hard. Nowadays, you can get 100% financing due to inflated real estate, so there really should not be many obstacles. I'm in transition between two companies, so don't have my lending limits now, or would have helped you out. Definately shop around.

Thats great news, i have an employment verification letter from the HR deparment as of June 21st with my at that time YTD Gross and my previous years earnings.

Thank You for all the responses so far

[2002civic]

it will also dpeend on your credit and TDS(% of money that services debt) so if you have a lot of loans, credit cards etc that will hurt your ability to get a mortgage

[Godfuader]

Originally posted by SunniSunShine

I also forgot to mention, we were wanting to do 100% financing, although if worse comes to worse we may be able to place a small down payment.
You have to keep in mind that anytime you go more than 80% financing, you need Genworth/CMHC insurance for the bank. Premiums for 100% financing are 3.1% with Genworth, meaning for a $330,000 financing you will need a mortgage of ~$340,000. Additionally its recommended that you have 1.5% closing costs handy as well (around $5000)

[SunniSunShine]

I dont think the $330,000 is set in stone, obviously we would like to haggle on the price, and drop some off as the market is pretty stale right now with all the listings.

[bulaian]

When I got my place last Decemeber, I went to a mortgage broker and they did not require a T4 from previous year. Just a letter/call to HR to verfiy my position, salary and length of time I've been there. Also they needed to verify the funds I had intended to put as a downpayment.

[SunniSunShine]

i am on commission sales so its a little bit different

[BigBearWest]

I would PM Rob. (D.Dub) He has been really good to me.

[HRD2PLZ]

Originally posted by SunniSunShine
i am on commission sales so its a little bit different

If you are on commissioned income, you might have to ask your Broker about "stated income."

As mentioned above, PM D. Dub (Rob) He has a great reputation on this forum for being able to help fellow members out.

[urban.one]

regardless of what the lender approves you for, dont overstretch yourself. i dont know what you sell but can you handle a slowdown in the economy even if its short lived for 6 months or so.


Originally posted by SunniSunShine
i am on commission sales so its a little bit different

[canadian_hustla]

if it is a letter of employment that you are using, you cannot use it if it states you are on probation (given that you have not completed the probationary period yet if any)

good luck

[wmkee]

El-Nino, help us out a few times, even with just advice!..

Pm him or myself I'll give you his number.

[el-nino]

Good morning. wmkee is right. I have helped him a few times with just advice. I can tell right away why your last broker used your t4s. It is because you are on commission. When a person's income is based on commission it becomes a bit of a risk factor for banks. Add no down payment it becomes a even bigger risk. Add that you are only 20 will probobly make a difference as well.
A lot of commissioned people ask me "why? I'm gonna be making like 100k this year"
That's great. but who is to say what your gonna make next year? This is the reason why your last broker used an average income of the last 2 years. It is a way for the bank to confirm income.
Sounds like wmkee pmd you my number. Call me anytime. I work late nights and early morning!

[Weapon_R]

PM me and i'll help you out

[SunniSunShine]

Originally posted by HRD2PLZ


If you are on commissioned income, you might have to ask your Broker about "stated income."

As mentioned above, PM D. Dub (Rob) He has a great reputation on this forum for being able to help fellow members out.

I have talked to a broker in regards to stated income without a down payment he said it is not an option.



Originally posted by urban.one
regardless of what the lender approves you for, dont overstretch yourself. i dont know what you sell but can you handle a slowdown in the economy even if its short lived for 6 months or so.


Oh totally bro. One thing about the line of business that i am in is that i dont start at zero every week, i have an established base of clients for the year that will bring me in at least 60k. Everyday i ad new customers and increase the sales to catapult that number well over that amount. I dont believe there will be too big of a slow down as it is in advertising. I could be wrong, nothing is ever promised tomorow today.



Originally posted by canadian_hustla
if it is a letter of employment that you are using, you cannot use it if it states you are on probation (given that you have not completed the probationary period yet if any)

good luck

I have been with the company for about 3 years. The letter states my employment and my YTD earnings and 06 Gross.



Originally posted by el-nino
Good morning. wmkee is right. I have helped him a few times with just advice. I can tell right away why your last broker used your t4s. It is because you are on commission. When a person's income is based on commission it becomes a bit of a risk factor for banks. Add no down payment it becomes a even bigger risk. Add that you are only 20 will probobly make a difference as well.
A lot of commissioned people ask me "why? I'm gonna be making like 100k this year"
That's great. but who is to say what your gonna make next year? This is the reason why your last broker used an average income of the last 2 years. It is a way for the bank to confirm income.
Sounds like wmkee pmd you my number. Call me anytime. I work late nights and early morning!

Thanks, i know its a little bit of a touchy subject because of the commission age and lack of downpayment.

I may be able to have a cosigner take this on for the first year and then remove themselves once the 07 T4s can be used.

Am i able to do that El-Nino?