The blog post How Mortgage Lenders Decide Your Maximum Loan Amount? was first seen on Moreira Team Mortgages
As you’ll see in the video, mortgage lenders consider your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses.
Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support.
According to the FHA, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, should total no more than 41% of income.
Home lenders also consider cash available for down payment and closing costs credit history and the rest of your financial picture when determining your maximum loan amount.