1.Debt-to-Income Ratio:
Lenders typically look at your debt-to-income (DTI) ratio, which is the percentage of your gross monthly income that goes towards debt payments. Most lenders prefer a DTI ratio of 28-33% for the mortgage payment, and a total DTI ratio of 60% or less for all debt payments.
2.Income Multiplier:
Lenders may use an income multiplier to estimate the maximum loan amount you can qualify for. A common rule of thumb is that you can borrow up to 3-5 times your annual gross income, depending on your credit, down payment, and other factors.
3.Specific Loan Amounts:
The exact loan amount you can qualify for will depend on your specific financial situation, including:
• Your gross monthly income
• Your existing debt payments (e.g., credit cards, auto loans, student loans)
• Your credit score and credit history
• The down payment you can make
• The location and cost of the home you want to purchase