How Much Can You Borrow?
Deciding how much you should borrow
Questions?
Click to Request a FREE Consultation
Here’s how you can decide how much to borrow:
Your income
Do you expect your income to remain stable or increase? If there’s a chance you could be laid off soon, or if you’re not 100% confident you’ll be able to pay your mortgage every month, it may make sense to consider another option.
Your monthly budget
Will your current income and expenses allow you to take on the responsibility of a mortgage and the additional monthly expenses that come with homeownership?
Your savings
Do you have money saved to cover the down payment, mortgage origination fees (usually 1% of the purchase price) and the closing costs? Will you still be able to keep the monthly mortgage payment within your budget?
Here’s how banks decide how much to lend you:
How much money you make
The more money you bring home every month, the more you’ll be qualified to borrow. You may also want to consider a co-borrower, whose assets can be included with yours.
The value of the home you choose
The home you purchase will be used as collateral.
Current interest rates
When rates are low, it costs less to borrow the same amount than it would at a higher interest rate. See current mortgage rates.
Your other debts
The amount of debt you carry on credit cards, revolving charge accounts and installment loans will impact how much additional credit a lender is willing to extend to you.
Your credit score
Banks use your credit score to the current purchase rates to predict how likely you are to repay your mortgage.
Results of the mortgage affordability estimate/prequalification are guidelines; the estimate isn't an application for credit and results don't guarantee loan approval or denial.
All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Other restrictions and limitations apply.
