Unlocking Realistic Mortgage Options with AI Legalese Decoder: How Technology Can Help Navigate the Complexities of Loan Approval
- April 27, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Contacting a Mortgage Broker and Realistic Approval Range
We will be reaching out to a mortgage broker to discuss our options, but in the meantime, we are curious about what a realistic mortgage approval range could be given our current income situation.
Our gross income is $147k, with the potential for it to increase over the years. We have no existing debt and a downpayment of around $60k. As first-time homebuyers, we are eager to explore our options.
## AI Legalese Decoder Solution
The AI Legalese Decoder can help simplify the mortgage approval process by breaking down complex legal jargon into easy-to-understand language. This tool can assist in navigating through mortgage terms and conditions, helping us to make informed decisions about our homebuying journey.
## The Frustration of Homeownership
While townhomes in our city are priced at $600k or more, we have reservations about being approved for such a significant amount by a mortgage lender. It’s disheartening to think that despite our efforts to increase our income over the years, owning a basic home may still be out of reach.
## The Financial Strain
Currently, we pay $2300 for a small 2-bedroom apartment, but impending renovations will force us to seek a new rental, likely at a higher cost. The thought of paying $2300 plus utilities for a similar unit is overwhelming, especially with a 3-month-old child in tow. The added expense of daycare, which can be upwards of $1100 per month, only adds to the financial burden.
## Considerations for the Future
Exploring the option of moving to a more affordable location comes with its own set of challenges, including the possibility of one of us quitting our job to find comparable employment in a smaller town. The uncertainty of job availability and potential salary disparities make this prospect daunting.
## Conclusion
Despite our gratitude for what we have achieved, it’s disheartening to feel like homeownership is an unattainable dream. We have worked tirelessly to improve our financial situation, only to face obstacles that hinder our ability to provide a stable home for our family. The AI Legalese Decoder can be a valuable resource in navigating the complexities of the mortgage process, offering clarity and guidance along the way.
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Mortgage agent here.
Roughly you can get a mortgage between $540-560K, assuming $4,000 property taxes for a freehold property. This is based on the assumption that you have no other debt, and at a 5.29% rate. If there is a maintenance fee, it can impact the qualification amount.
I would be a little cautious given your high daycare costs. Wait 2 years before 4x your salary. Otherwise 3x is a safer bet.
I’ve used a broker and went directly with banks. I’m not fundamentally for / against either option as long as I get the right rate, loan amount, and terms.
My experience is that mortgage brokers tend to quote a very conservative number. The good mortgage people at the banks (admittedly few and far between) have always been able to go back to their underwriting teams to squeeze more money out.
As far as rates go, it’s been a toss-up with a slight edge to the banks for me.
The “use a broker” thing that gets repeated here all the time isn’t necessarily true, and it’s probably worth shopping around.
Generally about 4 times your income assuming no debt.
Once you get an affordability number from a lender/mortgage broker, make a detailed budget as if you owned and include ALL expenses and see where you end up.
I make a bit less than you and I got approved (actual approval, not pre-approval which is non-binding) recently for 550k from one of the big banks talking to them directly, so you probably will be fine with that. It’s gonna be hard with 1100/mo daycare cost + carrying cost of your property to actually afford it, but you might be able to pull this off fighting for a 30 yr amortization and carefully budgeting your monthly spendings. I’d suggest run the numbers yourself before making a decision to buy or not.
Is this your first home purchase? You could pull your RRSPs to increase your down payment if you have any.
Also people may hate you, but call the daycares every day and ask about if any spots open. Just do it. Every day. Send emails.
Consider starting with a condo.
147×4 is the upper limit but you would be house poor and I don t recommend that. I bought according to the monthly payment we would have to make. Our logic was to still be able to pay our mortgage if one of us loose their job.
I understand the frustration to have to settle for a condo and the market craziness.
But condos can be really great. Now that it s yours and you re not stretched out financially, you can build built-in furnitures that work with the space or buy specific furnitures. And a well thought out / decorated space is frankly nicer to live in (to me) than a bigger but empty / filled with shitty furnitures space.
Additionally, If you are too busy with kids or not really manual, a house can be hard and expensive as hell to maintain.
Plugging into TD “affordability-calculator” you could get approved for up to ~610k if the banks are generous but that’s the upper limit and a guaranteed way to end up house poor.
Realistically the financial guideline is your mortgage should be no more then 3x your gross income so a 501k house (441k mortgage) is your upper limit. I would say go ahead get pre approved and see what’s out their on your budget you can find deals here and there and there’s always the condo market which is softening everyday with more supply coming in. Buying as a FTHB is about getting on the property latter and building equity towards your next purchase not about finding your dream home.
When approved for a mortgage, make sure to shop around for a personally owned life insurance policy rather than accepting the mortgage insurance the bank or broker will offer. A long list of benefits to owning your policy personally and far often is cheaper than the rates they will provide you.
With that income it won’t take long to save up a larger down payment. Why not hold off for another 6 months
Your mortgage /mortgage insurance / home insurance / utilities / property tax are going to be around $4500 / month. Add food / fuel / other spending on top of that and you can probably swing it for around $6500 a month. Doesn’t leave you too much left over at the end of the day on $147K gross income.
Your mortgage /mortgage insurance / home insurance / utilities / property tax is over 60% of your monthly take home.
I would run all this through a spreadsheet and do your own calculations.
really depends where