Proof of spending

In order to get a more rounded picture of your financial status, the FFMA requires brokers to learn of your living expenses. They can then add your salary, expenses, mortgage and interest payments to determine if you will be able to keep up with payments.

The broker will look at three categories of expenses including, critical, basic and additional commitments.

Critical Expenses: These are non-negotiable expenses that no one can forgo.

• Food
• Utilities ( phone, water, electricity and gas)
• Household cleaning and laundry
• Essential travel ( to work and school)
• State and local mandated taxes
• Buildings insurance (it is usually a condition of your mortgage that the building must be insured)
• Ground rent and service charges (for leasehold properties)

Basic expenses: These expenses are necessary, but not constant like critical expenses and can occasionally include a non-essential

• Clothing
• Household goods (such as furniture and appliances) and repairs
• Personal goods such as toiletries
• Non-essential transport
• TV and Radio
• Childcare

Additional commitments: These are payment processes that you have not yet finished and might affect your ability to take on more commitments.

This covers other payments you know you will have to pay, including:

• Credit card bills or loans
• Child and alimony payments

All the above information will help the broker be able to find the right mortgage model that is right for you and get you approved.