Child Support and Child Tax Credit

For mortgage qualification, many lenders now accept Child Tax Credit as income. Most lenders require that the child be no older than 16 years of age.

You may not want to wait for your mortgage renewal if your child tax credit and support do not extend past the first three years of the next term.

With the recent mandatory “Stress Test” on Canadian mortgages, income to debt ratios has become more important. Both child support and the child tax credit can be used to help you as they qualify as income *some restrictions apply and lender specific. If the use of this income is necessary for qualification, it is important to renew your mortgage before your child/children are 15-16 years of age. Lenders typically need to see three years left of receiving this income in order to use it for a new 5 year term.

Single moms may need to pay particular attention to this as these support incomes are more often used to help them qualify. So if your mortgage renews when your children are 17 years of age, you will be allowed to renew with your current lender and not make changes to the mortgage subject to the mortgage is in good standing. However, if you want to take out equity, refinance, renovation, or buy a second home you will need to prequalify and this is where it could become an issue

Give me a call to discuss a plan that will work for you and prepare in advance so that you can make changes prior to these income sources not being eligible for income qualification.