Gross Debt-Service (GDS) Ratio

The percentage of gross annual income that is needed to pay all costs associated with housing. The most common formula is:

mortgage payment + property taxes + heating + 50% of condo fees (if applicable) / gross household income.

The GDS ratio is capped by most lenders at 39% for the best borrowers.

Gross Monthly Income

The total income a person earns each month before taking into account expenses or deductions.

Guarantor

A person that is not a Borrower on the mortgages but promises to make the mortgage payments in the event the Primary Borrower is unable to pay off the loan. Why might a lender require a guarantor? Usually, because the person applying for the mortgage has sufficient income to support the mortgage but doesn't have sufficient credit strength/history to qualify for the mortgage on their own.