5 Factors that help to determine how much mortgage you can borrow
When you plan
to apply for a mortgage loan, you
often think for a "mortgage how much
can I borrow". You must have an idea
about your capacity to repay the mortgage
so that you don't loose your investment
property to foreclosure.
1. Private mortgage insurance (PMI):
If you can't make 20% of the home's
price as a down payment, then you
have to purchase private mortgage
insurance. This becomes an additional
expense that can alter how much mortgage
can you afford to borrow.
2. Debts: Another factor that determines
how much mortgage can you afford to
borrow is the amount of your debts.
You need to keep your debt repayments
under 36% of your gross income. If
your debt payments exceed 36% of your
gross income, then the lenders will
not give you a big loan. You can calculate
it easily. You have to multiply your
annual salary with .36. Then you need
to divide it by 12. This is the maximum
amount of money that can pay for your
debts.
3. Downpayment: Lenders see whether
you can make a sizeable downpayment
when you apply for your mortgage.
If you can make a downpayment of 5%,
then the mortgage will be 19 times
the size of your downpayment. You
can calculate it by multiplying the
amount of your downpayment cash by
19.
4. The real cost of a mortgage: You
have to make several payments in addition
to the actual mortgage payment when
you buy a house. These additional
payments include home owners insurance,
home owners association fees, property
tax, etc. These payments should always
be included when you ask yourself
the question for a �mortgage how much
can I borrow�.
5. Income: Mortgage payments have
to be limited to 28% of your gross
monthly income. You can calculate
your maximum monthly mortgage by multiplying
your annual salary with .28 and then
dividing it by 12.
If you analyse these five factors,
then you can know the answer to your
question for a �mortgage how much
can I borrow�.
Your home may be repossessed if you do
not keep up repayments on your mortgage.
Sekkappan Alagu trading as Nachu Finance is an
appointed representative of The Whitechurch Network
Limited which is authorised and regulated by the
Financial Services Authority. We do not usually
charge a fee for mortgage advice. However you
do have the option to pay a fee of 0.80% of the
loan value and The Financial Services Authority
may not regulate all products or services on this
website
Address :
225 Beverley Drive, Edgware, Middlesex, Ha8 5NL,
North West London - Near Wembley & Harrow
