The Borrowing Process

Questions About the Mortgage Qualification Process

When you're ready to apply for a mortgage, you may have lots of questions about the borrowing process, as well as products, rates and fees. Here are answers to some common questions:

How is a loan application assessed?

Most lenders base their affordability calculations on two traditional debt to income ratios. First, your Gross Debt Service Ratio (GDSR) is based on your monthly housing costs, including mortgage payments, property taxes, heating costs, and 50% of applicable condo fees. Lenders prefer that this ratio does not exceed 32% of your family's gross monthly income.

Second, your Total Debt Service Ratio (TDSR) is your monthly housing costs plus all other debt (loans, credit cards, lease payments). Lenders prefer that this ratio does not exceed 40% of your family's gross monthly income.

As part of the mortgage qualification process, your lender will also review other important factors, such as your credit history or credit rating (see our Tips to Build a Good Credit History article).

What information is needed when applying for a mortgage?

Before you sit down with a lender think about your goals, and your ability to manage new debt. Ask yourself how much you think you may need, and consider how much extra cash you have each month to cover a loan. Also decide if your cash flow is regular enough to permit monthly or weekly repayments.

To help your lender understand your financial situation, bring key documents that:

  • Show your monthly income;
  • Show your current monthly housing costs or rent;
  • Indicate the value of vehicles, properties or savings you may have;
  • Confirm the balances and monthly payments of your current debts, including loans, credit cards and lines of credit.

Remember, if you're applying jointly, each of you must bring your own financial information.

Want more answers?

As part of your conversation with a Scotiabank Advisor, we can help you find the mortgage that's right for you. That means exploring options that fit your cash flow needs and ability to deal with life changes. We can walk you through each type of mortgage, from fixed rate to variable rate and closed to open term, and explain the benefits of each.

We can then help you find a solution with the right mix of affordable payments today, and flexibility in the future. In addition, we can show you ways to become mortgage-free, faster and easier, by making a few small changes to your mortgage that can make a big difference over time.

As part of the discussion, we can also provide you with a preapproved mortgage, so that you will know exactly how much you are qualified to borrow. That way, when you find the perfect home, you can act quickly. And, with our up to 120-day rate guarantee, you can take your time to find the right home, without worrying about interest rate fluctuations*.

Your first step is speaking with a Scotiabank Advisor to talk about your goals, and find the mortgage that's right for you.


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Talk to a Home Financing Advisor on the phone or at a location of your choice.

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You can be pre-approved, search for a home, and get a mortgage all in one place with Scotiabank’s online mortgage application process.

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