How can I improve my GDS and TDS ratios to qualify for a larger mortgage?
Improving your GDS and TDS ratios involves reducing debt or increasing income, potentially qualifying you for a larger mortgage.
Paying down existing debts, like credit cards, will lower your monthly obligations; consider exploring options for increasing your income.
Key Points
Your GDS and TDS are key to showing lenders you can handle your mortgage payments.
When you renew your mortgage, lenders will look at your finances as if you're a new customer.
Lenders will check if you can still afford your payments if interest rates go up or your income goes down.
No specific minimum credit score of 600 is mandated by OSFI or CMHC; lenders have varying requirements, often higher than 600.
For mortgages with a small down payment, lenders usually want your GDS to be below 39% and your TDS below 44%.
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Related Questions
How does the new OSFI guidance affect mortgage switching for you?
The latest OSFI guidance simplifies switching lenders at renewal for borrowers with existing uninsured mortgages.
What documentation is typically required for a mortgage application, and how might this differ for a 'straight switch'?
While specific requirements can vary slightly among lenders, the standard documentation confirms income, credit history, and property details.
What are the Loan-to-Income (LTI) limits, and how do they impact lenders?
OSFI is introducing Loan-to-Income (LTI) limits on the uninsured mortgage portfolios of federally regulated financial institutions (FRFIs).
How does 'stress testing' affect the stability of financial institutions?
Stress testing evaluates how a financial institution's mortgage portfolio would fare under tough economic times.