This is an extremely important factor when planning to buy a home. Many aspects are taken into consideration by lenders to come to an amount that will be given to you. The major factors are income, credit, debt and assets. You can have a lot of income but no credit and get turned down by many lenders. This lack of credit can mean many things. If most of your money is tied up in a business or you only have business credit cards, or you have only used cash for your purchases to this point in your life. Your credit is a lending lifeline and without it, you are basically out of luck. If you have great credit but only a little income, you will have to look for a very affordable home because the bank will not lend you a lot considering your income is low. A major problem in the U.S. today is student debt. You can have a great job and good credit, but if you have a major amount of student debt, some lenders will not get near you. Assets can also be a drain on how much you can afford. If you have multiple cars or properties, a bank can look at that negatively. I don’t mean to scare you, but this is why it is extremely important to have a good and knowledgeable lender who can help you figure out a comfortable mortgage amount that also suits your living needs. Check out this calculator from CNN Money to see how much you can afford, but remember to speak with a professional lender first. They will meet with you for free and discuss your needs or you may contact me directly for more information.
Cary Daniel Blumenfeld
Harry Norman, Realtors