Sarah A. Colucci, York Region's Mortgage Expert. Savings Guaranteed.
  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?

Sarah Colucci's Mortgage Blog

Stay enlightened about mortgage & real estate news in Canada.
Mortgage News 2022

What Are Extended Ratio Mortgages? If you can’t get approved with a bank, you must read this.

12/1/2020

3 Comments

 
Picture
If you’re self-employed, don’t claim much income, are in a unique financial situation or just can’t qualify with the bank for whatever reason, it’s imperative you learn about extended ratio mortgage lending programs. 

Why? 

It’s no secret major banks have stricter lending guidelines and also have to adhere to Government-mandated policies such as conservative GDS and TDS thresholds.

What are GDS and TDS?

GDS stands for Gross Debt Servicing. GDS is the percentage of your income that is required to pay all your monthly expenses, including mortgage principal and interest payments, property taxes and heat. 

Banks usually allow a GDS of 35-39% depending on your credit score. If your score is over 680, then GDS can go up to 39% whereas if it’s lower, the maximum GDS is 35%.   Your credit score must not be lower than 620 in most cases. 

TDS stands for Total Debt Servicing. TDS is the percentage of your income that covers all of your debts. So besides the liabilities that make up GDS we are also including all other loans and their monthly payments such as credit cards, car payments, and personal loans. Banks allow a TDS of between 42-44% depending on your credit score. 

What are extended ratios programs?

Extended Ratio programs allow for a higher percentage of GDS and TDS. For example, an extended ratio program may consider 50% GDS and 55% TDS, which means you can qualify for significantly more mortgage.


Are interest rates higher?

With more risk usually comes higher interest rates, however, extended ratio programs offer extremely competitive interest rates, which make them a great option for those borrowers that don’t fit into the big bank’s criteria.

Here’s an example of a client I recently got approved who was declined by four major banks. 

Mortgage amount $750,000
Discharged from Bankruptcy for 1 year only. 
Credit Score 604
Interest Rate: 3% for a 3-year fixed term. 

Do you have questions or do you need advice about financing? Please call or write. 

Sarah A. Colucci
Mortgage Agent Lic. M14000929
Mortgage Edge, Broker 10680
Direct:  (647) 773-4849
​

RSS Feed

3 Comments
heloc vs home equity loan link
9/20/2021 06:20:10

Found your post interesting to read. I can't wait to see your post soon. Good Luck with the upcoming update. This article is very useful, interesting, and effective.

Reply
heloc vs home equity loan link
11/9/2021 03:23:29

Excellent write-up, I have always enjoyed your articles, you’re such a wonderful writer, always on point. This article is loaded to the hilt, I thoroughly enjoyed reading it and at the same time, I was hugely enlightened. I will keep developing my writing skills so that one day I will be at your level. Thanks

Reply
First Home Buyer Loan link
9/1/2022 03:06:04

Thanks for sharing this post. I love reading it.

Reply



Leave a Reply.

    Picture

    By: Sarah Colucci

    Senior Mortgage Agent, Lic. M14000929

    Archives

    January 2023
    October 2022
    September 2022
    July 2022
    June 2022
    May 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    August 2021
    July 2021
    June 2021
    May 2021
    February 2021
    December 2020
    November 2020
    October 2020
    September 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    February 2019
    January 2019
    December 2018
    August 2018
    May 2018
    April 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017

    Categories

    All

    RSS Feed

GET IN TOUCH WITH US

Let's get started today.



Address

411 Queen St. 
Newmarket, ON
​L3Y 2G9

Sarah A. Colucci, Mortgage Agent Lic. M14000929
Sherwood Mortgage Group
Licence # 12176

Telephone

Direct: 647-773-4849
​
Email: scolucci@sherwoodmortgagegroup.com
Picture
  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?