The Mortgage Qualification calculator determines whether a purchaser will qualify for a particular mortgage based on the offer price of a property.
As you click (or Tab) from one field to the next, the system performs calculations displayed below in bold italic. When all values are entered, click Calculate Qualification to display whether or not the mortgage qualifies.
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Prepared For: |
Client's name. |
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Offer Price of Property: |
Offer price in dollars. Numbers only. |
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Down Payment: |
Down payment available, in dollars or % of offer price. Numbers only. If the down payment is entered in dollars, the system calculates the percentage when you tab or click off this field. If the down payment percentage is less than or equal to 35% (i.e., the loan-to-value is greater than or equal to 65%), select the applicable insurance rate at Mortgage Insurance, below. NOTE: Minimum down payment is 5% of the lending value of the home. CMHC has now expanded eligible downpayment sources to include ledger incentives and borrowed funds. Purchasers must meet debt ratio requirements to qualify. |
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Mortgage Amount: |
System-calculated. Offer less down payment. |
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Mortgage Insurance: |
If the down payment is less than or equal to 35% of the property's value, select the applicable insurance rate from the drop-down list. (When mortgage insurance is required, a table with applicable insurance rates displays when you click or tab away from the down payment field. Note the premium for the loan, then select this rate from the drop-down list. NOTE: Some lenders may require insurance on a property even if the down payment exceeds 35%.) |
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Total Mortgage: |
System-calculated. Mortgage Amount plus Mortgage Insurance. |
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Mortgage Amortization (years): |
The life of the loan in years. |
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Interest Rate: |
Interest rate of mortgage as a percentage (e.g., 7.85) |
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Mortgage Payment: |
System-calculated. Assumes Mortgage amount, Monthly payment period, Years as entered, and Rate as entered. |
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Est. Monthly Property Tax: |
Estimated property tax in dollars. Numbers only. |
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50% Monthly Condo Fee: |
If the property under consideration is a condo, enter 50% of the estimated monthly fees. |
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Est. Monthly Heating Cost: |
Estimated monthly heating cost. Numbers only. |
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Cost Per Month: |
System-calculated. Sum of Mortgage Payment, Heating Cost, Condo, and Tax entries. |
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Gross Income: |
Monthly gross income for up to three purchasers. |
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Monthly Debt Costs: |
Optional. Monthly dollar amount for loans (e.g., auto loans, personal loans), charge cards, and other debt. |
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Debt Ratios: |
GDS (Gross Debt Service Ratio) represents the percentage of pre-tax income that may be applied to housing costs. Some lenders may consider a GDS of more than 30%. You may change the default displayed. TDS (Total Debt Service) represents the percentage of pre-tax income that may be applied to housing costs and debt combined. You may change the default displayed. |
To Prepare a Mortgage Qualification
Select the Financial tab at the top of any TMLS page.
At Financial Tools, click Mortgage Qualification.
Enter data as appropriate.
Click Calculate Qualification. Scroll down to view whether mortgage qualifies.
To print the qualification statement, click Print View, then select Print from the browser's File menu.
You can print documents without extraneous reference information at the top (header) and the bottom (footer) of each page. (See Special Printing Format.)
Some fields show pre-filled (default) responses. These can be changed as desired.
To test "what-if" scenarios, click Clear, then enter new values as desired. What-if scenarios might explore the effect of higher or lower offering price, income, debt, down payment, interest rates; or of shorter or longer loan duration.
