How much mortgage can I get approved for? (Animated)

– [Mujtaba] DNS in an important part of the approval process. So, there are certain criterias and guidelines we’d like.


– [Mujtaba] DNS in an important part of the approval process. So, there are certain
criterias and guidelines we’d like your credit to be at to see maximum, minimum approval amounts. So, if your beacon score
is technically above 680 where we wanna be at, we want your TDS, which kinda stands for total debt ratio, so a total debt ratio is what we take, is we take your income, we
take your monthly obligations, plus the new monthly
obligations of your home you’re looking at
buying, which is gonna be your mortgage payment, property taxes, utilities, we want that to
be around 44% of your income and the reason why the banks
wanna be able to do that is we want the extra 64, I’m sorry, 56% to be available just in
case you might need it. We don’t want you to
be house poor for sure. So, if your beacon score is above 680, we can go to a maximum 44% of your TDS but unfortunately, if it’s lower than 680, we want to be at 42% of TDS. And these are just bank
accounted guidelines that we take a look at. We also look at something called GDS which is your gross debt ratio, which is just technically
the housing costs that we talked about. For the housing costs, once again, it’s just your mortgage payments, your property taxes, and your utilities that technically could
be part of the home. We want that to be, once again, if your beacon score is around 680, we want that to be around 39%, which is the maximum, you know, if your beacon score is less than 680, we unfortunately can’t go more past 35%. When we say someone has
a beacon score of 680 it just means to the bank
that one out of 680 people would most likely default on a loan compared to someone who might
have a beacon score of 700. So, one out of 700 is, it’s
less riskier to the bank compared to one out of 680
or even one out of 600.

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