Mortgage Calculators How Much Can I Borrow?
Looking to buy a new home? One of the first questions people have when they begin to make plans to apply for a home loan is mortgage calculators how much can I borrow?
Using a mortgage calculator to figure out how much you can borrow is certainly a great first step before you begin the sometimes arduous process of applying for a home loan. That being said there are a number of different factors that will influence how much you can borrow from a mortgage loan lender. The following is an outline of a few of these factors.
Your monthly gross income – Your monthly gross income is one of the primary factors when trying to calculate how much you can borrow for a home mortgage. When determining what the number is, consider all of your income. This includes wages, investment income before tax deductions, overtime hours, special bonuses, additional jobs, anything and everything basically that you can call income is considered.
In the event that you are self employed the total income to calculate will be your net taxable income over the last 2 years. Generally speaking a lender will want to proof of at least a few years of income before you are eligible to qualify for a home loan. If you do not have 2 years of income to show, you still have options. Though rarer and rarer these days, a stated income loan is still possible.
Annual Housing Expenses – Another factor in determining how much you can borrow for your home mortgage is your annual housing expenses. A lender is going to want to look at how much you will be paying each month on the home you are applying for, and they will also take into consideration your home owners insurance expenses as well as property taxes; both of which are going to vary greatly depending on where you live.
Monthly Debt – Finally your lender is going ti factor in what your monthly debt obligation is. This means that if you own another property, make payments on a car, or even if you have an unpaid balance on a credit card, your lender is going to calculate that in to whether or not you can afford the home loan you are applying for.
The long and short of it is that in regards to mortgage calculators, “how much can I borrow?”, your bank is going to add up all of your monthly expenses and make sure that you have enough coming in each month to be able to afford the new mortgage. If you can, you stand a good chance of being approved. If you can’t… good luck!