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I plan on purchasing a home if I match into a 5-year program. I've 1001 questions (Will my future attending earnings or my current resident earnings be taken into account? Can I use my LOC towards my down payment? etc). Does anyone have any recommendations for resources? Thanks in advance

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4 minutes ago, William Osler said:

I plan on purchasing a home if I match into a 5-year program. I've 1001 questions (Will my future attending earnings or my current resident earnings be taken into account? Can I use my LOC towards my down payment? etc). Does anyone have any recommendations for resources? Thanks in advance

sending you pm

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4 hours ago, Synth1 said:

I'm also interested in information about this, could those with experience DM or just post in this thread?

Still a student, but I remember my Scotiabank advisor saying they can work it out so they will get you a mortgage based on what your income should be like post-residency, but I have not purchased a house so I can’t say for sure

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I purchased a condo on a mortgage about 3 weeks ago. Living there now. From what I recall, the big banks have a program where they assume your future income for mortgage application if you're: a resident or an M4. I was still able to use my LOC for the downpayment. 

Two caveats

I believe that the government just enacted a law which prevents anyone from using an LOC for mortgage financing including the downpayment. Saw it in the news just a week or two after my mortgage was confirmed. I believe it is going to go into effect July 1st but don't quote me on it. Also, unsure as to whether it applies to Canada or BC (I'm from BC).

The bank that you have the LOC with may restrict what you may or may not use the LOC for. I'm with RBC and they said I was not allowed to use it for any non-educational expenses. I was about to cancel with them until one of them told me that it is "up to you how you would define an educational expense". Is a new property an educational expense? You decide.

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1 hour ago, Coldery said:

I purchased a condo on a mortgage about 3 weeks ago. Living there now. From what I recall, the big banks have a program where they assume your future income for mortgage application if you're: a resident or an M4. I was still able to use my LOC for the downpayment. 

Two caveats

I believe that the government just enacted a law which prevents anyone from using an LOC for mortgage financing including the downpayment. Saw it in the news just a week or two after my mortgage was confirmed. I believe it is going to go into effect July 1st but don't quote me on it. Also, unsure as to whether it applies to Canada or BC (I'm from BC).

The bank that you have the LOC with may restrict what you may or may not use the LOC for. I'm with RBC and they said I was not allowed to use it for any non-educational expenses. I was about to cancel with them until one of them told me that it is "up to you how you would define an educational expense". Is a new property an educational expense? You decide.

Ha, yeah that can be such a grey area. Technically you shouldn't be able to do it. Also I don't see anything in most LOC contracts restricting their use in any way (and I have seen some rather non-educational uses I must say). 

It is also hard to stop in practise. 

There are limits to how much they can give you credit for future earnings (and there is also a non-zero chance you won't finish any particular residency program so predicting future income is hard. People do tend to discount low probability events as being zero chance - that is not a good idea when the consequences are bad if it occurs. Banks have to look at the big picture). 

Usually at the least you have to be able to make reasonable payments from your residency salary. The tests they are required to use don't let them have a ton of wiggle room. 

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6 hours ago, Anaik said:

Still a student, but I remember my Scotiabank advisor saying they can work it out so they will get you a mortgage based on what your income should be like post-residency, but I have not purchased a house so I can’t say for sure

"The projected income is an average estimated amount based on available industry data and is subject to change.  Your actual income may vary.  Terms and conditions apply."

From Scotia Website

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4 hours ago, Coldery said:

I believe that the government just enacted a law which prevents anyone from using an LOC for mortgage financing including the downpayment. Saw it in the news just a week or two after my mortgage was confirmed. I believe it is going to go into effect July 1st but don't quote me on it. Also, unsure as to whether it applies to Canada or BC (I'm from BC).

https://www.cmhc-schl.gc.ca/en/finance-and-investing/mortgage-loan-insurance/calculating-gds-tds

The Canadian Mortgage and Housing Corporation (CMHC) enacted the new "no borrowing for downpayment rule". You can circumvent this by taking out a 20% downpayment and not requiring the CMHC but your GDS and TDS might be too high, even with the boost with pay as an attending

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11 hours ago, William Osler said:

https://www.cmhc-schl.gc.ca/en/finance-and-investing/mortgage-loan-insurance/calculating-gds-tds

The Canadian Mortgage and Housing Corporation (CMHC) enacted the new "no borrowing for downpayment rule". You can circumvent this by taking out a 20% downpayment and not requiring the CMHC but your GDS and TDS might be too high, even with the boost with pay as an attending

ha they sure didn't pay attention to TDS when I took out a mortgage. Things have tightened up over time.

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