Your mortgage loan application has been submitted. Now you are waiting for the approval. Are you wondering how much mortgage loan can you get? It usually depends on what you can afford to pay how much is your debt-to-income ratio among other things.
Generally, your mortgage will be twice your gross income. But it will go down or up, depending on other factors. For one, lenders will factor in the amount towards your debt repayment. Lenders would like to see a low debt-to-income (DTI) ratio. Ideally, it should be lower than 36% with 28%, or lower, going to mortgage servicing or payment for your housing. These are general figures as lenders vary with their qualifications depending on the client’s circumstances. If you go higher and reach 43% of your DTI, the lender can still qualify you, but it will be tough because lenders will see you as somebody who might have difficulty fulfilling their financial obligations. As a rule, the lower the DTI, the easier it will be for your mortgage loan to be approved.
Lenders will not only consider if you can afford to repay your mortgage loan, but they will also review your credit score. By looking at your credit score, these lenders can determine if you will be a credit risk or not. If your credit score is low, they will give you a higher interest rate, but if you have a high credit score, 670 and up, you will get better rates. So while you still have time, revisit your credit report and try to see if there are entries that shouldn’t be there anymore and repay your debts on time to help clean up your records.
Again, these will depend on the lenders as they have their requirements and qualifications. So better talk to your mortgage loan officer to know what they can offer you and tell you how much you can get for your mortgage loan.