Income is not the only thing that can decide how much mortgage you are qualified for because you have daily based expenses as well. Most mortgage lenders would prefer to see a 20% down and the higher your down payment, the better rates and monthly payment amounts you can expect.
The concept of mortgage is that a borrower after paying their taxes, food, utilities, gas, clothes, etc., can only safely afford to pay up to a certain percentage of their gross income on housing (income ratio). In addition, a borrower can only safely pay a percentage of their gross income in recurring debt and housing expense (debt ratio).
Another factor is your credit score. It is one of the most important factors when it comes to deciding your home loan eligibility. While some lenders can be a little flexible with credit score, most of them are very cautious about lending to people with low credit scores. However, your home loan application will not get straightway rejected if your credit score is low. Your application will also be assessed on the basis of other variables like income, age, experience, number of dependents, type of employment, credit and payment track record, and many more. Do you have a record of paying your obligations on time? If so, that’ll reduce your interest rate and allow you to pay a bigger monthly payment should you choose.
How much home I can qualify for and how much home can I afford are not the same thing. Unlike determining how much you qualify for — which is based on objective mortgage guidelines and financial ratios — figuring out how much you can afford requires a thorough examination of your situation. What kind of lifestyle do you lead? Do you like to travel and dine out often or are you more of a homebody? Only you know what your monthly expenses really are.
Qualifying for a mortgage includes a number of variables. It is best that you find a good mortgage lender. A mortgage specialist can guide you through all this and advise you on your home loan options.