This Weeks Rates:
Insured:
- 5-year fixed: Starting at 3.79%
- Variable: Starting at 3.44%
Insurable:
- 5-year fixed: Starting at 3.89%
- Variable: Starting at 3.65%
Conventional:
- 5-year fixed: Starting at 4.09%
- Variable: Starting at 3.85%
CMB:
- 5-Year: 3.12%
- 10-Year: 3.68%
Debt ratios are the hidden gatekeeper on nearly every mortgage application — and most realtors don't know how to work around them. In this episode, Scott Dillingham shows you how GDS and TDS ratios work, when to bring in B lenders or private lenders, and how to get clients approved at higher purchase prices.
- Debt Ratio Variations: The same 44% debt-to-income ratio means different things at different lenders due to varying calculation methods for credit cards, student loans, and income sources
- Credit Card Calculations: Some banks use 3% of your total credit limit as a payment, even if balances are zero, significantly impacting qualification
- Income Treatment Differs: Child tax benefits, maternity leave, rental income, and self-employed income are evaluated differently by each lender
- B Lender Advantages: Alternative lenders accept 50-60% debt ratios, use actual payments instead of calculated minimums, and allow guarantor income
- Private Lender Options: When traditional financing fails, private lenders focus on the overall story and exit strategy rather than strict ratios
- Never Accept First No: If a bank declines based on debt ratios, consult a mortgage broker who can explore all available lending options
Links to Show References
LendCity Mortgages: https://lendcity.ca
- (00:00) - Introduction to Close More Deals Podcast
- (00:34) - Why Understanding Debt Ratios Helps Close More Deals
- (01:14) - The 44% Debt-to-Income Ratio Explained
- (01:30) - How Banks Calculate Total Debt Payments
- (02:13) - Hidden Credit Card Calculation Methods
- (02:34) - Student Debt and First-Time Homebuyer Considerations
- (03:08) - Income Source Variations Across Lenders
- (03:14) - Self-Employed Income Treatment Differences
- (03:44) - Why Clients Shouldn't Apply Randomly to Lenders
- (04:10) - Introduction to B Lenders and Alternative Financing
- (04:30) - How B Lenders Use Rental and Guarantor Income
- (04:49) - B Lender Payment Calculation Advantages
- (05:18) - Self-Employed Approval Differences with B Lenders
- (05:40) - Private Lender Options for Unique Situations
- (06:07) - When Private Lending Makes Sense
- (06:26) - Closing Remarks and Call to Action
Show Resources:
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