Q: How do lenders determine how much house I can afford?

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A: Lenders use two main formulas: Gross Debt Service (GDS) and Total Debt Service (TDS) ratios. These calculate how much of your gross monthly income goes toward housing costs and your total overall debt payments.

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Q: Does the Canadian mortgage stress test affect my affordability?

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A: Yes. The mortgage stress test requires lenders to prove you could still afford your payments if interest rates rose. You must qualify at a rate of 5.25% or your actual rate plus 2%, whichever is higher.

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Q: Can I get a mortgage with bad credit in Ontario?

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A: Yes, it is possible. While major banks ("A" lenders) have strict credit score requirements, mortgage brokers have access to "B" lenders and private lenders who focus more on your income and down payment than just your credit score.