Getting approved for a mortgage can become a confusing and frustrating process at times. Here are some suggestions and guidelines to keep in mind as you go through this process.

It is important to remember the position your financial institution is in when you ask them to provide you with a mortgage. They are most likely dealing with many requests for financing and loans at the same time as you are asking for yours. All bank employees have a fiduciary duty to ensure they are working in the best interests of their employer and their shareholders. While you might qualify for a certain amount, the lender might not want to invest your requested amount of funds in the property you want to purchase. It is vitally important you have a full understanding of the criteria most lenders look at before a mortgage will be approved.

GDS:- (Gross debt service) compares only your income to your mortgage expenses. Generally, no more than 30 to 32 per cent of your gross annual income should go towards serving your mortgage debt. This debt responsibility usually includes principal, heating costs, property taxes and maintenance fees, if you are buying into a strata complex.

TDS:- (Total Debt service) compares your gross annual income to all of the GDS responsibilities, plus any other additional debts you may have. Items that would be included in this analysis are credit card debt and payments, vehicle loans or leases, outstanding income or property tax liabilities and any other monthly payment responsibilities you may have. Depending on the lender total debt payments should not exceed 37 to 40 per cent of your annual income.

Different lenders will likely offer you a variety of different options when you apply for a mortgage. As an example keep in mind, chartered banks usually have a higher level of operating expenses as opposed to mortgage brokers or secondary lenders, and those factors will play a large part in how much you can qualify for, what the down payment might be and what interest rate you may be offered.

Remember, the mortgage that offers you the lowest payments might not always be the best one for you.

When you are taking on a mortgage, make sure you understand what your responsibilities are, and what is included in the fine print. For example, make sure you have the option to pay off the outstanding balance, if you should need or want to. Become familiar with terms such as amortization, mortgage term, interest rates and balloon payments to name a few.

You are most likely locking yourself into making some payments for the foreseeable future, so review everything that is included and if you have any concerns, discuss them with your lending representative or Realtor®