How to qualify for a mortgage with a potential legal rental suite
November 14, 2023
This Guest Blog Brought To You By: Maryann Chase, TMG Mortgage Group
Homeownership has always been a dream for Canadians…a Legal Rental Suite may help.
Over the last few years with Government Changes to qualifying rates and the increase in interest rates it is more difficult than ever to qualify to purchase a home.
One strategy Arbutus Properties has created to overcome the challenges of qualifying for a mortgage is to develop the basement and purchase the home with a legal suite. By including the income from a rental suite it is opening the doors to homeownership for many.
I am also a licensed Mortgage Professional with TMG Mortgage Group, and I can advise you with your mortgage and the purchase agreement with Arbutus Properties.
A couple with a household income of $95,000.00
5 yr fixed @ 5.84%
Would NOT qualify for a $420,000.00 home.
$420,000.00 home with a legal suite – owner occupied.
Legal Suite cost for Arbutus Properties to develop – $56,600.00 plus taxes.
Extra rent income of $1,400.00 x 12 months = $28,000.00
which would bring their household income to $123,000.00 and which now can increase the total mortgage amount you could qualify for $482,000.00*
Other Benefits of Legal Rental Suite:
- Helps to lower your monthly mortgage payment.
- As landlords you can write off your property tax and heating* (depending on credit score)
- Value of your home would increase.
- Development of the legal suite by your home builder, at time of purchase would be covered under the New Home Warranty.
If you have questions about adding a basement suite to your new build home, please reach out to us and we’d be happy to help answer your questions!
*All qualification numbers, debt ratios, credit score would have to be verified. Numbers are for example purposes only.