Julia and Clyde Holmes spent a long time preparing for their mortgage and placed special focus on ways to increase their Qualifying Amount. Here are their tips to help increase your Qualifying Amount so that you can work towards having a bigger budget for this life step.
Investing in your education can help set you up for career progression and higher earning potential. One of the main factors that determine your Qualifying Amount is your salary. With training, education and the right attitude under your belt, you could be in line for career advancement opportunities and healthy recurring income.
Increase your budget by developing alternative income sources. Assess your skills and brainstorm ways you can serve the needs of others and even start your own side business. For instance, those handy with tools can offer handy-man services. Alternatively, those with a love for cooking or baking can look into catering opportunities. Whether your skills are in household repairs, cooking, painting, repairs, teaching or graphic design, there are many opportunities out there. If you don’t feel that you know enough in specific area this may be a chance to take a course or pursue online learning to build your abilities.
It’s never too early to start growing a nest egg for your future home. Take a critical look at your spending and identify incidental expenses that can be reduced (e.g. shopping or recreational habits) and divert these funds into a ‘Mortgage Fund’ instead. Another focus should be on reducing your debt. Prioritizing paying off your debt will go a long way towards impacting your Qualifying Amount. If you implement both saving and debt reduction together, you can use your savings to help reduce your debt, and be in a better financial position.
Co-borrowing refers to teaming up with another trusted individual or party to increase your total income and thus Qualifying Amount. In these agreements there is a primary borrower and the other party is known as the co-borrower. Often, the co-borrower’s income may be what facilitates the approval of the mortgage. It’s important to be educated on the legal obligations of co-borrowing, especially as both parties must commit to honouring the debt repayment terms, regardless of changes in the relationship. TTMF encourages both parties to seek independent legal counsel before entering into a co-borrowing relationship so that they are fully informed. You can read more on co-borrowing and ways to avoid co-borrowing traps in the TTMF article here.
We hope the above insights help you in your journey towards the right mortgage fit for you.