Mortgage 101

Integrum Mortgage

Mortgage 101 takes you through the financial facts of owning a home.

Why Are You Purchasing A Home?

How much can I afford?

Once you’ve decided to buy a home, your lender will determine how much money they’re willing to lend you by looking at factors such as:

  • Your income and debts
  • Your down payment
  • Mortgage loan terms

Your lender will then give you a mortgage pre-qualification or pre-approval letter. This document tells you how much money your lender is willing to lend to you, which will help you determine how much house you can afford. A housing expense ratio of 32% or less means that you can afford the home that you’re looking at because your total housing costs (mortgage payment, property taxes and heating costs) will account for no more than 32% of your gross monthly income. Mortgage insurance may also be required if your down payment is less than 20% of the purchase price.

A mortgage pre-approval, takes things to the next level by giving you a firm commitment of money from a bank (subject to certain criteria). With a mortgage pre-approval, you know exactly how much you can afford and when you’ll be able to act on your new home.

  • If you take out a fixed-rate loan, the lender will guarantee your rate for 120 days and prevent price hikes (it can fall if rates go up).
  • Because real estate agents will know you’re serious about purchasing a house, they’ll take you more seriously.
  • You may save money by avoiding houses that you know are out of your price range.
  • When you make an offer, the seller may be more inclined to consider it seriously because you have strong financial backing.
  • As you know your monthly mortgage payment amount, you will be able to construct your long-term budget.

As well getting a pre approval is completely free and there are no obligations to follow with a mortgage if things don’t work out.

Taking a look at what you have and what you can afford

Another advantage of getting a pre-approval is that it motivates you to examine your entire financial situation and how it will withstand the purchase of a new house. This procedure, for example, may help you determine:

  • How much of a down payment you wish to make
  • The total household income
  • Your current obligations (and their monthly payments), as well as your anticipated housing expenditures
  • Your current financial habits

Remember, everything begins with knowing how much you can afford when it comes to purchasing a home. You have more important things to do than waste time shopping for homes that aren’t within your budget. When you know how much money you have available, you’ll be better positioned to discover the house that’s right for you. So, get started on a pre approval today.

Integrum Mortgage

I highly recommend Intergrum & Kelvin as your mortgage broker. I bought a home with 0 knowledge about mortgages and Kelvin was super helpful and walked me through the process. He is very knowledgeable, responsive, and a pleasure to work with. On top of this, he got me an excellent rate! I will definitely be a return customer. Super happy!


First Time Home Buyer