This video spells out the basic math and other considerations for figuring out how much you can borrow according to lenders.
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Primarily your debt-to-income ratio is taken into account. This is the ratio of your gross pre-tax income to your expenses. Your expenses include both housing and non-housing expenses like car payments, student loans, alimony, or child support.
Mortgage payments should not exceed 29% of your gross income. Total expenses should not exceed 41% of your gross income. These rules of thumb come from the FHA.
Down payment, closing costs, credit history, and your overall financial picture, are also considered.
As you can see, it’s relatively simple to figure out what you can realistically afford. Do the math and get a good idea where you stand!!
Let us know if you need any assistance and remember, we are here for you!
You are not alone.
Your Bass Lake Realty Team
Call 559-642-3610 or click to email