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
Latin: now for then. Descriptive of actions which are performed after a deadline has elapsed, but retroactively have the same effect as if they were carried out in a timely manner. For ...
The seller disclosure is a statement made in good faith regarding the condition of the home he/she is trying to sell. There is a seller disclosure form – called “Form 17” ...
Legal obligation to pay taxes associated with owning property or earning income. For example, a real estate owner must pay property taxes. ...
How many days, months, or years are required before a new building has the desired occupancy ratio. The occupancy rate influences the amount financial institutions are willing to lend. ...
The term market segmentation is mostly used in marketing for assembling prospective buyers in groups based on their needs and their response to a marketing action. One definition of market ...
The meaning of recordation defines the act of recording deeds and various property documents in a public registry office. Recordation proves ownership claims on a property or other assets. ...
Building more than six stories high serviced by elevators. ...
Everyone is aware of the perplexing complexities of a real estate transaction. Enter Opendoor, a company that aims to simplify this experience. If you're a house hunter, seller, real estate ...
You may have heard the term codicil in a conversation but might have yet to understand it entirely. What’s the codicil definition? “Codicil meaning” refers to a supplement ...
Have a question or comment?
We're here to help.