There are four areas that lenders look at

1. Income & Employment History

A lender will consider how much of your total income you will be spending on housing and on other debts. This helps lenders decide whether you can comfortably afford your home. Also, lenders generally want to know that you have income stability. If you are self-employed, hourly or on commission, a 2-year history of your income may be required.

2. Debts

These include any car payments, credit cards, loans, etc. These are all factored in when calculating your purchasing power. Your debts will be reviewed when your credit bureau is pulled.

3. Down Payment

Your down payment must be from your savings or investments or they can be gifted from family members. The Government of Canada has regulated that most down payment sources need to be tracked for 90 days and in the form of bank statements or with gift letters before being used to purchase a home.

4. Your Property

The value of the property you wish to purchase is an important factor in deciding how much a lender will lend you, and whether you will be required to have an insured mortgage.