The Lender’s Equations: How Much Mortgage will you Qualify for? + MORE Jun 13th

Many entrepreneurs rely on credit cards to keep their small businesses running. Check out these statistics on their charging and payment habits

Sammu (left) and Mandy Dhaliwall (far right) (Photo by Jennifer Roberts)
In our April 2016 issue of MoneySense, we introduced you to Sammu and Mandy Dhaliwall, a young married couple with three kids from Brampton, Ont. They are trying to juggle RRSPs, TFSAs, paying down their $350,000 mortgage as well as their $90,000 home equity line of credit.  Throughout the year we’ll be giving them a financial challenge every four weeks to help them get their finances in tip top shape. Make sure to follow along! 
Will shopping for mortgage rates hurt our credit score? »
How to juggle RRSPs, TFSAs, RESPs and a mortgage »
Challenge No. 2

Sammu and Mandy were asked to get all the details of their life insurance and disability insurance coverage. With a young family that includes three kids under the age of five, it’s important to keep these policies up to date with changing circumstances. Here’s what they found.
Sammu and Mandy’s experience
We each checked with our individual employers and found that we had the following coverage…

Is premium travel to Europe really suffering that much? It sure seems so, there have been so many great business class offers from the U.S. and Canada to Europe over the past week and half and now AC is bonusing business class to four of their European destinations for pretty much the rest of the year not just the slower summer season.Offer details:Double Aeroplan Miles when you fly Air Canada in Business Class between Canada and London, Paris, Amsterdam or Lyon. Register Online (Registration is required) Register and book by Jul 31 for travel until Dec 17, 16

Knowing how much you can reasonably, comfortably and responsibly contribute to home ownership is paramount in your making a wise and sound investment on your Canadian property. The big four factors that generally contribute to this mortgage amount are:

Monthly income generated
The amount you can contribute to your down payment
The mortgage interest rates and term you qualify for
Other financial commitments or debts you are obliged to pay

Lenders basically use two rules to determine the mortgage you are eligible to be funded to receive, in addition to examining your credit history and FICO score:

Gross Debt Service Ratio (GDS)
Total Debt Service Ratio (TDS)

The Gross Debt Service Ratio (GDS) includes mortgage payment (principal and interest), heating expenses and property tax (referred to in the mortgage industry as PITH), as well as 50 per cent of any applicable condominium fees. GDS should equate to 32 per cent* or less of your gross qualifying income.
The Total Debt Service Ratio (TDS) includes your total monthly debt obligations (vehicle payments, student loans, credit card payments, child or spousal support payments, etc…

For those who think blowing off their credit card debt is better than paying it. Here are the caveats and what experts have to say