Low Income Home Ownership in Oakville

Oakville is expensive, there is no doubt about this. Someone with a low income may think that owning a property in Oakville will be incredibly difficult. This is not exactly true. While a single detached home may be out of reach, there are a number of lower cost properties that can definitely work for a low income mortgage applicant.

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Even Low Income Oakville Residents Can Get Mortgages

Let’s start by considering this: if you have low debt, but a low income (i.e. below $50K), and are paying over $1,000 per month in rent. In this case many would think that there is no way they could not get a mortgage. This is not true! You could potentially qualify for a mortgage up to and even over the level of your rental payments. This way the monthly housing dollars you spend helps you build some equity, while providing you a home!

How do the Financial Ratios Work?

Here are some things to consider:

Rule 1: Gross Debt Service Ratio also known as GDS is that monthly cost of housing, which includes the monthly mortgage payment, heating, and property taxes and is less than 35% of pre-tax household income. (On a 40K income this would be $1,200 – but we can work some flexibility around this depending on your credit score)

Rule 2: The TDS (total debt service ratio) should not be higher than 42% of income. TDS is all sum of all the debt payments you make. The 42% again, is a guideline – we have lenders who can be flexible regarding this guideline under certain circumstances. Speak with us about options.

If you can save money for a 20% down-payment, then this all becomes much easier. Avoiding the strict rules of mortgage insurers gives you even more flexible options to get a mortgage in Oakville if your income is low.

Bad Credit or Low Income Mortgages

While most traditional banks and financial lenders (A-lenders) typically turn people with low credit away – there are several lenders in our network that will consider mortgage applications for people with low income and or bad credit.

  • If you have bad credit, typically the criteria is that you have a viable income that you can prove. On the other hand if you have low income, the helpful factor becomes good credit. The key we encourage our clients is to be realistic, understand what they can afford monthly and we can create all kinds of solutions for them. We typically have several clients who are in a similar situation across Oakville, and we always work towards a solution that makes sense for them. Please don’t hesitate to contact us in complete confidence as we will assess your current financial circumstances and identify mortgage solutions that are right for you. Contact us today!

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