FINA 200 Lecture Notes - Lecture 6: Fixed-Rate Mortgage, Home Inspection, Opportunity Cost
16 Apr 2018
School
Department
Course
Professor
Document Summary
Most individuals pay a down payment of between 5-20 % of the price and then obtain a mortgage to finance the remaining cost. Pre approval certificate: issued by most financial institutions, provides you with a guideline on how large a mortgage you can afford and an estimate of your mortgage payment based on your financial situation. Mortgage approval is not guaranteed, this certificate lets buyers know you are serious about buying a house. Gross debt service ratio (gds): your monthly mortgage related debt payments including mortgage loan repayments, heating costs, property taxes, and half of any condominium fees divided by your total monthly gross household income formula slide 6. In most cases, financial institutions will provide you with a mortgage loan only if your gross debt service (gds) ratio is no more than 32 percent. Total debt ratio (tds): your mortgage-related debt payments plus all other consumer debt payments divided by your total monthly gross household income formula slide 7.
