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How much of a mortgage can I
qualify for?
One of the best ways to discover just how
much you can qualify for is by investing a few minutes and complete
our online Pre-Qualification form.
Generally
speaking, your income will be one of the major factors which will
determine the amount of a mortgage that one may obtain. There is a
definite relationship between the maximum amount of monthly mortgage
payment that one may qualify for and the amount of income that one
earns. Most lenders will feel comfortable as long as your monthly
payment Also known as PITI principal and interest, plus one twelfth
of your real estate taxes and applicable insurance (hazard and
private mortgage insurance (if necessary), DOES NOT EXCEED
APPROXIMATELY 33% OF YOU GROSS MONTHLY RECURRING INCOME. The more
difficult task at hand here is to be able to determine what elements
of your income may NOT be considered to be recurring.
EXAMPLE: Persons with less than two years
of documented "bonus, commission or overtime", may find that it will
NOT be counted toward qualifying income. It may ONLY be considered
as a compensating factor. Mortgage lenders will also want to review
the relationship between your NEW MONTHLY PAYMENT(PITI) AND YOU
REGULAR RECURRING MONTHLY OBLIGATIONS. These could possibly include
payments for auto, student, credit cards, leases, alimony, child
support, etc. Generally, most lenders will not want your new monthly
payment PLUS your regular monthly recurring obligations to exceed
approximately 39%-40% of your gross monthly income. Any installment
debt which has 10 payments or more remaining, generally must be
included in the calculations. While this can give you an idea of how
much of a mortgage a lender would feel comfortable with, only an
experienced loan officer can accurately determine the amount of a
mortgage that most lenders would most likely approve. A basic
interview and review of certain pertinent facts with a Mortgage
Affiliates loan officer is called a Pre-Qualification. This is in
principle only. There is no guarantee that your loan will actually
be approved. BEWARE! If you have had some type of financial
difficulty or there is the least bit of question whether or not you
loan would be approved, you should seriously consider a
Pre-approval. Basically, this is applying for a mortgage without
having a home in mind. There is usually only a minor fee, it takes
less than ten days and can ease the minds of both buy and seller
alike. To complete the Pre-Approval process, you must accumulate a
substantial about of paperwork, however, if you are going to do this
transaction, you will need to do it sometime any way. Why not now?
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