Reporting your correct income in financing application is important

Equifax conducts a survey of Canadian home buyers about stating annual income
By Mark Schadenberg
Qualifying for a mortgage is a combination of three items -- downpayment, annual proof of income, and credit (Beacon) score or current commitments to credit.
Equifax is the Canadian firm which tabulates your credit score.
A lender will calculate your Total Debt Service (TDS) Ratio, which includes student and car loans, and minimum commitments to credit lines and credit cards. The TDS (or slightly different Gross Debt Service Ratio) will essentially say how much you can afford monthly in principle, interest and taxes on a mortgage. Sometimes you may have to maximize the amortization time period (to 25 years) just to bring down your monthly payment to meet the requirement.
Obviously, today's microscopic low interest rates are an integral part of the equation to permit you to purchase 'more of a house'.
However, what is permitted in disclosing your correct family income? If you are employed by a company (not self employed), your lender will require a signed letter from your employer to match your stated income.  

Read the Toronto Star article below about fraud and a survey of consumers conducted by Equifax.
There is a long list of lending institutions and mortgage brokers you can discuss your scenario with, and be sure to be pre-approved for a specific amount before offering on a home. The main four reasons to talk about your credit score or Beacon number before signing an offer are:
- Guarantee of an interest rate for up to 120 days. Should you discuss the pros-and-cons of variable rates and fixed rates in advance? Certainly.  
- Any credit 'mistakes' can be cleared up in the early-on of a process, (Not during the crunch time of fulfilling conditions) such as an old utility bill which some company says was not paid (Example).
- You will fully understand the importance of NOT going on a spending spree before offering on a property. (That last minute vacation placed on your credit line should wait a few months.)
- You have built a relationship with a lender who can quickly approve your paperwork through CMHC or Genworth in less than (about) 8 days because you are not a new face. (Conditions on financing time period). Otherwise, your Realtor will require at least 10 days for approval.
Call me any time about names and numbers of great local people who are mortgage advisers as you may even want to contact a credit union as all lenders are equally motivated to 'find and keep' new customers.  

LINK:
http://www.thestar.com/business/real_estate/2014/08/11/is_inflating_income_lying_on_credit_applications_ok.html

Mark Schadenberg, sales rep

Royal LePage Triland, Woodstock

(519) 537-1553

Email: mschadenberg@rogers.com