Buying a Home: How Much Can I Mortgage?

Buying a Home:  New Financing Guidelines

HOW MUCH CAN I MORTGAGE?

Based on my income, how much of a mortgage can I obtain?  Many things go into qualifying for a mortgage.  To get a rough estimate, multiply your gross income by 3.5.

Depending on your other liabilities, such as car loans and credit cards, the amount may go up or down.  Lenders will also look at your assets - real estate, bank, savings accounts and other investment accounts.  Most lenders will ask for two months of bank statements, all pages, to substantiate your assets.  If it is an investment account, you’ll only need last quarter’s statement.  If you have any large deposits other than your regular income, you’ll be asked to explain it.  Be prepared to source the funds deposited into your accounts.  You will need to show that you have the money needed for your down payment and closing costs.

Most mortgages require two months of home payments in reserve, which includes monthly principal and interest, real estate taxes, home insurance, mortgage insurance (if applicable) and home maintenance (if it’s a condo).

Your loan officer may, at this point, give you a ballpark figure you are qualified for.  Now you just need to make a determination with what mortgage payment you will be comfortable with.

Happy House Hunting!

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