Advice to Buyer's

Step I - Determine what you can afford, after using the buyers costs and the calculator the next step is to see up to what price you can spend on a home by calculating your gross debt service ratio (GDS) most of the primary lenders say that your monthly housing expenses should not exceed 30% of your family income (before taxes)

To calculate your gross debt service ration (GDS) take your total monthly gross (before tax) income $____.00, multiply that by the maximum GDS ratio (30%) x.30 = _____.00

Example: John and Sue have a gross family income of $66,000 per year, or $5500 per month. No more than $1650 per month ($5500x30%) can be applied to housing expenses.

Step II - Calculate your Total Debt Service Ratio (TDS). Your TDS takes into account monthly housing expenses plus other debts or loans you may have.
To calculate your Total Debt Service Ratio (TDS) take your monthly gross (before tax) income $ .00 and multiply it by the maximum TDS ratio (40%) Subtract regular monthly expenses such as credit cards, car payments, loans ect.. This will give you the maximum amount available for a mortgage payment including property taxes.

Example: John and Sue have a gross family income of $66,000 per year or $5500 per month, they also have two car payments totaling $575 per month, a student loan of $150 per month and credit card payments of $175 per month, therefore they can apply no more than $1300 of their monthly income to housing ($5500 x 40% = $2200 - $900 = $1300 per month)

The above are only examples it's best to check with your financial institution.