Two Things That Can Seriously Impact Your Mortgage Approval
When it comes to getting a mortgage, most people focus on income, credit score, and down payment—but there are two other big factors that can affect your approval, and they often catch people off guard.
Let’s break them down:
1. Your OSAP Loan
Yes, your student loan payments matter—and not always in the way you might think. Some people assume that increasing their OSAP payments to pay it off faster is a good thing. And while that might help long-term, it can actually reduce your mortgage approval.
Here’s why: Lenders look at your monthly debt payments, not your total debt. So if you’re paying $320 a month toward OSAP, that amount gets factored into your debt-to-income ratio—and that can lower the amount you’re approved for.
Pro tip: Lowering your OSAP payment to the minimum—say from $320 to $60—could increase your borrowing power by up to $100,000! That’s a big deal. And no, it doesn’t mean you’re ignoring your debt—it just means you’re being strategic about it.
2. Car Payments
This is a big one. Buying a new car (especially before or during your home search) can have a major impact on what you qualify for. People are often financing vehicles over 5–7 years now, and that long-term debt follows you.
A good rule of thumb? For every $400 in monthly car payments, you reduce the amount of mortgage you can qualify for by about $100,000.
So, if you’re thinking of buying or moving, try to hold off on that car purchase until your home deal is done. And if you already bought the car, make sure to update your pre-approval—it really can make a difference.
The Bottom Line:
Your mortgage approval isn’t just about how much money you make or how much you’ve saved. Things like OSAP and car payments play a huge role—so planning ahead can save you a lot of stress (and money).