How much can I borrow for a mortgage based on my income?
It is not easy to find the exact amount you can borrow for a mortgage. Although it is essential to look at your income, this is only one indicator. For example, you can have a high annual income but also spend a lot of money in debt. Not only that, but most mortgage home loans require a minimum deposit amount.
That being said, there is a general outline that can help you figure out how much to borrow based on your income alone. You do not want to spend over 70% of your income on your housing needs. Instead, experts recommend that your mortgage loan be 33% of your income or lower.
In other words, just because you make 500,000 a year does not mean that you should also purchase a home of the same amount. You want to live below your means so that you feel comfortable.
To figure out the exact amount, make a budget first listing out your monthly debts and obligations. Then divide the numbers to find a percentage. As long as you have more than 33% left, the housing amount works! If you do not want to do the work, we get it! Mortgage House has a free and easy to use best mortgage loan calculator online based on income.
Mortgage Borrowing Conclusion
Borrowing money for a loan can be scary, especially if you are unsure of how much you want to borrow. First, figure out your monthly income and obligations. Make sure to choose a loan amount that is less than 33% of your income. Still unsure? Call Mortgage House experts to get a more accurate estimate.