Trying to survive...

Usually when a lender looks over a loan application, the new payment is taken into account and the debt service ratio calculated on the future situation. It sounds like your debt ratios are still too high even with a lower rent payment. You probably don't have a lot of money saved up so in order to obtain 95% financing of a mortgage the bank would require CMHC insurance. The maximum debt service ratios for CMHC are 32% GDS and 40% TDS.

At just a rough guess you would need to be making between $4250 and $5000 per month in order to qualify. ie:

Proposed mortgage payment $700/mo, property taxes $100/mo, power $50/mo, student loan payments $850/mo = $1700/mo. These figures are just for illustrative purposes.

$1700/.40 = $4250. Now if you have any other payments such as credit card or other loan payments these must be added into the equation and your required income will increase.

You mentioned that you are making interest only payments and that the actual payment is really $1050/mo. In this case the contractual payment must be factored in, bringing your total payments to $1900/mo requiring an income of $4750 for a TDS of 40%.

If you are making more than that - which is not unreasonable with both of you working - and your TDS is at or below 40% then it should still be possible to find an institution that might consider it. However CMHC is the one that will either give it the thumbs up or thumbs down.

 ferren,

 What's the deal with CMHC and their "attitudes" towards student loan borrowers entertaining mortgage acquisitions? I recall how they were back in the day ... and even still today I hear horror stories relating to how they "disqualify" people for mortgage insurance resulting from Crown indebtedness. Not too many people can muster up that 25% down payment, especially in areas where property costs are so bloody high.

 I had a discussion with a para-legal buddy of mine not long ago about this subject and we had come to some pretty miserable conclusions. i think you might know wherre I am going with this in reference to the relationships between the various Crown corps and sectors that we duke it out with every day.

 In the nut shell, it does seem that the govenrments are punishing people for mistakes - and bad judgment calls that have occurred by their own doing. I just find it so hard to believe that governments can hide themselves while in plain view with their heads stuck in the sand. And, when asked what the heck they are doing, they just tell you that this sort of activity and behavior is a daily routine at these government levels.   

dawnbh

I would like to suggest trying a mortgage broker. I approached a broker for my last purchase and could not be happier with the results. For me the transaction worked like this:

-I provided all of my personal info---they did (1) credit check.

-They told me where I stood on traditional financing, and discussed my credit report asking me for more specific details about trouble areas in it, so that when speaking with potential creditors, they could "defend/explain" my report.

-My broker then sent my mortgage request out for offers to provide the loan.

-I received offers in a couple of days. I weighed the pros and cons of each offer and choose the on that suited me.

I could turn back at any point. I was not obligated to the broker in any way($). The mortgage company paid my broker his commission. I will never shop for my own mortgage again, not so long as the broker is willing to do the work for me.

Just a note, my credit history is far from perfect and I have plenty of financial obligations.

Hope this helps.

On the safety side do not allow yourself to be roped into a high interest loan, or private lender loans. (BEWARE see a Lawyer before you sign anything). It may cost a bit now but if a real estate deal goes bad you will be in it for thousands, believe me.

Ok, so I have about $10000 in loans with CIBC (which are in good standing), and I have about $8000 with CBCL. And I'm a chronic late payer when it comes to credit card debt accumulated while I was in school. We're hammering money at them now, but it's going to take time to get this right. Doesn't help that hubby had a credit card go to collections about 6 years ago.

Is my credit really shot? I mean, am I screwed in terms of getting a mortgage in the next 9 years (I figure 3 years minimum to pay CBCL off, if I continue giving them 3% of the principal per month, then 6 years to repair my credit)?

Or is there a hope that hubby and I can buy a house in the next few years? I'm resigned to paying CBCL, I have no problem with that (make your bed, lie in it--it's my own fault), but the idea of not being able to buy a house for another 9 years keeps me awake at night. Would I be able to get a house if I had a huge downpayment? Are there people out there willing to take on people like us with crown debt?

Blue:

Who does CBCL represent? HRDC? CHartered bank?

I would also order your credit rating from both Equifax and Transunion. If you order it from Equifax, they will give you your Beacon score (for an extra 20 or so bucks) which will give you an idea of where your credit rating is at. Banks and lenders use the Beacon score to determine your credit worthiness.

Thank you all for the replies.  It's great to hear the opinions of others especially sometimes when you feel alone in all of this.  

I guess that we will just keep plugging away at it as long as we can because, really, there's not much else to do.  I'm hoping that we can try to reapply again next year for a mortgage, and this time we will try a broker.  Our first try was with the Royal Bank, and they said no but said that they could try with a co-signer (like anyone would want to put that on someone else) or a "B" list lender.  I wasn't sure what that one was. 

Next year we should have a few more bills paid off (small visa balances and such) so hopefully it will look better for us. It's just always such an embarrasment for me to go into a bank asking for money and when they ask about our debts and I start rattling off our student loan balances and payments and you can just watch their facial expressions change. You expect it everytime and you defend it, or try to, but you really can't make it look any better.

Like a lot of people say, it's not like we're out there racking our credit cards up thousands of dollars buying cars and furniture, etc, we just tryed to better ourselves with an education, and for that, we are punished. There is no help for us and there are no payment plan options available that go beyond the 14.5 yrs that we are given, no matter how much of an income we have or our other obligations.

We do what we can do I guess. That's the only option we have right now.