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  • You've found your dream house. The problem? It's expensive, maybe out of your budget. You're wondering just how large of a mortgage loan you can get. Mortgage lenders look at several factors when determining how much money they'll lend you. Most of these are difficult for you to control, so that expensive dream house might not be in your future.

    Income, Debt Are Key

    When determining how much money to lend you, mortgage lenders and banks consider a host of factors. How much money you make each year and how much debt you carry are two of the most important. The more money you make each year and the less debt you have, the more money a mortgage professional will lend you. According to RealtyTrac, a real estate information site, foreclosures reached all-time highs in 2009. To help prevent future foreclosures, lenders are hesitant to lend large amounts of money to borrowers with too much debt and too small an annual income.

    Credit Score Matters

    Mortgage lenders also consider your credit score when determining how much money to lend you. This score is a numerical representation of the way you've handled your money in the past. If you have a high credit score, it means that you have a history of paying your bills on time. Mortgage lenders are more comfortable lending you larger amounts of money if you've shown that you pay your bills. If your credit score is low, you'll qualify for a smaller mortgage loan or no loan at all.

    Try A Larger Down Payment

    If your mortgage amount isn't large enough to get into your dream home, try to increase the size of your down payment. By putting down more money upfront, you need a smaller mortgage loan to get into your dream house.

    Source:

    Quicken Loans: How much loan do you qualify for?

    RealtyTrac: Foreclosure statistics

    Bankrate: Mortgage affordability calculator

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