I Need a Mortgage, How Much Can I Borrow?

Like many people you want to get the most for your money. When you look at the pricing of the houses you want compared to your credit score you may have questions. So you question to your lender, I need a mortgage, how much can I borrow? You certainly don’t want to borrow more than you can afford, but you also want enough to live in something you are comfortable with.

When look at your income, you need to calculate how much you actually bring home each month. You would take your regular weekly pay, without bonuses and overtime, and multiply this by 52, and then divide that by 12. This is what you know you will earn without taking risks.

After you have calculated your yearly and monthly salary you can look at how much mortgage you can afford. If you were to make $25,000.00 a year, that is about $2083.00 per month. This amount is your gross income (before taxes are taken out).

If you have tuition loans, child support, credit cards, bank loans, auto loans, or any type of outstanding credit loans, you need to subtract the monthly amount from this figure. One third of what you have left or about 36% is what you can reasonably receive as a mortgage loan amount.

While this may seem complicated, a mortgage is a complex decision that will be with you for quite some time. At the minimum 7 years, but it could last as long as 40 years. Having a stable job and proving that you will continue to work will also be a factor in the decision of how much you can borrow.

If all of this seems like a lot of math to calculate, never fear, the internet is here! There are mortgage calculators on-line to help you as well as plenty of lenders or mortgage brokers that will help you get started. A loan that fits your needs is not only in your best interest, but in the lending institutions best interest as well.

There is another factor to take into consideration when you think about borrowing. If you have a down payment, you may be able to secure a larger loan. While you may be able to get one, you need to seriously think about if you really need one. The financial stress of borrowing to much money is worse then living in a house that you may not at first think is your dream home.

When you decide that you are going to ask the big question, “I need a mortgage, how much can I borrow?” Make sure you do your research and that you are honest with your calculations. Have all of your paperwork organized so you know where you money is going each month, and how much debt you can reasonably afford to take on, comfortably knowing that the money you borrow will fit your housing desire.