Your borrowing capacity, often referred to as the amount you borrow, will differ from lender to lender. To get an indication of how much you can borrow, you should arrange an appointment with your local mortgage professional Marty Searing at 414-303-1215. To get a complete individual consultation of your current situation, have your employment information and proof of any liquid assets you may have on hand.

If you are staying within a given debt to income ratio, there are interest-only loan programs that can provide lower housing payments, which can help you qualify for a larger loan amount.

When determing how much you can borrow, there are compensating factors such as your credit rating, equity position, and loan-to value. The better these factors are the more likely you can borrow to a higher debt ratio. Check with your mortgage professional for details..

How much debt you have, how much income you make and your credit scores will be the biggest factors involved with determining how much money you can borrow. Your income and debts will provide your debt to income ratio, which has a major role in how much you may be able to borrow from the lender.

The amount you can borrow is directly tied to how much income you have. The general rule is your debt to income ratio should not exceed 50%. To determine your debt to income ratio and the amount you can borrow take the household monthly PRE TAX income and multiply it by .5 that is the amount you can use to pay a mortgage, taxes and other monthly revolving bills such as credit cards and car loans. Bills like cellphone, cable and utilities are not figured into Debt to income so be sure and plan accordingly when deciding on how much to borrow.

Your Mortgage Rate and Borrowing Power is Based on 8 variables.

Employment History
Liquid Assets
Credit Score(s)
Loan-to-Value
Loan Amount
Income Documentation
Debt-to-Income Ratio
Bond & Security Rates

All these factors are taken into consideration when you apply for a Mortgage. The higher your credit score, the lower your rate. The More Liquid assets you have, the lower your rate and so forth.

Lenders will look at your income and compare your outstanding debt. They are more willing to lend when the loan payment is a smaller percentage of your income.

 

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