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Home Mortgage Preparation :: Mortgage - How Much Can I Borrow?
Mortgage - How Much Can I Borrow?:
I'm Getting a Mortgage, so How Much Can We Borrow?
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If you're applying for your first mortgage, "how much can I borrow?" is likely the first question you'll ask yourself. Instead of waiting until the approval process or blindly shopping for homes unaware of whether you can actually afford them, it's a question you should answer early.
To find out how to figure out how much house you can really afford, keep reading.
Start With a Basic Mortgage Calculator
Before you set a meeting with a local mortgage consultant or call a realtor, just do a simple online mortgage calculation. Most of these calculators allow you to input the amount of your down payment, your gross monthly income, mortgage term and estimated interest rate.
Take a look at http://http://www.mortgage-calc.com for a full range of calculators, ranging from rent vs. buy calculators, tools for calculating the total cost of your mortgage, how much can I borrow calculators, and mortgage calculators that are both basic and complex.
Ideally, no more than 28 percent of your gross income should go to your mortgage payments, and that's assuming you have a low debt load. If you're currently carrying a lot of debt or are expecting a pay cut, you may want to consult with a mortgage broker or lender on a more in-depth basis.
Get Pre-Approved
Once you've chosen a lender or mortgage broker, you should go through the pre-approval process. By being pre-approved for mortgage financing, you can shop for homes with confidence - knowing exactly what you can and can't afford.
Having that financial backing and security in your financing also means you'll be coming from a stronger offer position. For example, if two similar offers are put in on a home, the sellers are more likely to look favorably on the offer with the solid financing.
Overall, the general rule of thumb is that you don't want to over-extend yourself and you should always remember that even if someone offers you a big mortgage - "how much can I borrow?" should still be the first question on your mind. In short, be honest with yourself and be realistic about what you can afford.
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Home-Mortgage-Preparation.com :: Mortgage - How Much Can I Borrow?