Jessica Bennet is a contributing financial writer at MortgageFit Community. She has been writing on finance for quite some time. She is an active participant in the forums wherein she helps people with suggestions to their mortgage problems.
If you are looking to buy a home with a mortgage, make sure you know how much you can borrow on your home. This will help you to look out for a home, which you can afford to pay for with the loan amount that you can borrow.
How much can you borrow – 3 factors to check out for
Lenders will offer a mortgage amount based on your income and liabilities. They’d like to take a look at any income proof that you may have. However, if you are concerned about “mortgage how much can i borrow?”, check out the 3 factors that lenders would consider:
- Your Property value: Lenders arrange for an appraisal to be conducted on your property in order to determine its current value in the market. Lenders usually may offer you a loan amount worth 85% of the appraised property value. If your income is high enough, they may be willing to offer you more.
- Your credit history: Lenders will review your credit report and check for any negative item such as charge-offs, foreclosure, bankruptcy, unpaid liens etc. If he finds that you have been through trouble paying for loans/credit cards and rent payments etc, it may affect “how much can i borrow for a mortgage?”.
- Property type: Lenders may not lend on all types of property. At times, lenders limit the amount they offer on certain property types, for instance timber-framed properties.
3 Tips to help you borrow comfortably
- Plan a budget if you still don’t follow one and check out how much money you can save and what your expenses or liabilities are.
- Use Mortgage how much can i borrow affordability Calculator to determine the maximum amount you can borrow.
- Avoid overstating your income as because if you do so, you may end up getting a mortgage that you may not be able to afford later on. Also, you’ll be committing fraud for which you may face criminal charges.
If you’d like to borrow as much as possible in order to afford the home you’re willing to buy, you’ll have to keep your credit record clean, get a correct appraisal report of your home and look out for lenders who offer the maximum on properties like the one you have.
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