How Much Money Can I Borrow To Buy A Home?
There’s really no easy and quick answer to “how much money can I borrow to buy a home?”
It will all depend on the overall financial health of the area in question, the financial health of the mortgage company in question and the risk that giving a loan to you will provide to that same company. However, the first two aspects mentioned will weigh less when you apply for a mortgage, after all; everybody wants some profit, right? So, if the overall market condition is good and the financial health of the company is great, they *might* get a portion of their earnings to re-invest to bring even more revenue but the bigger part of it will be converted into profit for its shareholders not necessarily on making your life easier by loaning you more. That’s capitalism, buddy.
Alright, are you lecturing me or answering how much money can I borrow to buy a home, RealEstateAgent.com?
Ok. Let’s cut to the chase. You will get as much money as the calculations of the mortgage company say you will be able to pay it back in a timely manner. And to figure out how much that means in your case, we will need to figure out what is your risk to the company.
To do that, you'll need to figure out what your gross income is (before taxes) monthly and yearly. To get a quick ballpark figure, take the yearly income of yourself - and your co-purchaser if applicable - and multiply by 2 to 2 1/2. Most people will fall into this category. There are other things to consider, however – like monthly debt payments and home-related expenses like homeowner’s insurance policy cost and homeowner’s association fees, your expected loan term and interest rates. If you have a large down payment combined with little to no bills, the lender may believe that you could afford a more expensive home than the ballpark figure allows.
An important thing to do in order to prepare yourself to lure the mortgage companies into a large loan amount is taking care of your credit score, developing good habits towards it. Once you understand what is a credit score and how does it impact real estate, you will be able to secure, most of the times, not only better deals, but with less hassle.
Popular Real Estate Questions
Popular Real Estate Glossary Terms
A roof forming a triangle from the eaves to the ridge of the roof. ...
People say time is money. The old-age cliche applies more than ever in our case as we define what the Time Value of Money (TVM) means. You’ll find the term time value for money ...
House made using standardized components that are preassembled on an assembly line in a factory rather than being built from "scratch" on a site. Normally, the prefabricate house is trucked ...
lease computed as a percentage of the underlying appraised property value. Under the terms of a reappraisal lease, the rent is periodically adjusted using an independent appraisal of the ...
The definition of reversion in real estate is the return of property or assets to their original owner after a prespecified event or occurrence. This real estate term is used primarily in ...
Directing the bank not to pay a check when presented at the bank. There is a service charge for this. If a contractor loses the check given to him, he may ask that the payor stop payment ...
Generally, a legal notice implies a method of official notification to an individual, organization, company, or the public that a particular event is about to occur. We can call a ...
In real estate terms, many consider having corner influence an extra financial advantage when it comes to transactions in most cases. Usually, enjoying a corner influence brings an ...
Documentation of zoning requirements and changes thereto. ...
Have a question or comment?
We're here to help.