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Mortgage Pre-Qualification

The Mortgage Pre-Qualification calculator pre-qualifies purchasers, determining the highest price property they may qualify for.

Completing the Form

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 the "Qualified for" purchase price.

Prepare For:

Client's name.

Gross Income:

Monthly gross income for up to three purchasers. (System calculates annual values and totals.)

Monthly Debt Costs:

Optional. Monthly dollar amount for loans (e.g., auto loans, personal loans), charge cards, and other debt. (System calculates total.)

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.

Mortgage Amortization:

The life of the loan in years.

Interest Rate:

Interest rate of mortgage as a percentage (e.g., 4.85)

Maximum Mortgage Payment:

System-calculated. Maximum monthly housing payment. (The system calculates a TDS limit representing the purchaser's TDS amount less the total monthly debt.  The lesser of 'GDS' and 'TDS limit' is used.)

Est. Monthly Property Tax:

Estimated monthly property tax. Numbers only.

50% Monthly Condo Fee:

If the property under consideration is a condo, enter 50% of the estimated monthly fees.

Est. Monthly Heating Cost:

Estimated monthly heating cost. Numbers only.

Maximum Mortgage Payment After Costs:

System-calculated. Maximum monthly mortgage payment after costs.

Maximum Mortgage Amount:

System-calculated. Applies Maximum Mortgage Payment After Costs, the Mortgage Amortization in years, and the Interest Rate.

Mortgage Insurance:

If the down payment is less than 20% of the property's value, select the applicable insurance rate from the drop-down list. (If you have not selected an insurance rate, a table with applicable insurance rates displays when you tab or click away from the Down Payment field.

Mortgage Applied to Sale:

System-calculated. Maximum Mortgage Amount less Mortgage Insurance, if any.

Down Payment:

Down payment available, in dollars. When you tab or click off this field, the system calculates the percentage. If the down payment percentage is less than or equal to20%, select the applicable insurance rate at Mortgage Insurance, above.

Highest Price:

System-calculated. Maximum house price the purchaser is qualified for.

Using the Mortgage Pre-Qualification Calculator

To Prepare a Mortgage Pre-Qualification

  1. Select the Financial tab at the top of any TMLS page.
  2. At Financial Tools, click Mortgage Pre-Qualification.
  3. Enter data as appropriate.
  4. Click Calculate Qualification. Scroll down to view the calculated qualification amount.
  5. To print the qualification statement, click Print View, then select Print from the browser's File menu.

Tips:

Adjusting for What-If Scenarios

To test "what-if" scenarios, click Clear, then enter new values as desired. What-if scenarios might explore the effect of higher or lower income, debt, down payment, interest rates; or of shorter or longer loan duration.

Related Topics

Get Documentation in PDF

Copyright Stratus Data Systems, Inc. 2011
Help for TorontoMLS, v. June 30, 2011