The amount of loan for which you qualify is based on two different calculations. Using what are known as qualifying rations, lenders evaluate your income and long-term debts to determine a 'safe' amount for your mortgage payments.  A fairly standard rations is 28/33.  Certain mortgage plans sometimes use more liberal ratios for example, the FHA uses 29/41.

Here's how it works:
With a 28/33 ratio, you'd be allowed to spend up to 28% of your gross monthly income for mortgage payments. The lender will then run a different calculation. This one is your loan payment and debt payments combined, which may not exceed 33% of your gross monthly income. To calculate exactly how much you may borrow, you also ned an estimate of current interest rates.

For example:
Suppose you had $1,000 a month for a mortgage payment; at 7% that would let you borrow about $160,0000 on a 30-year loan. At 6% the loan amount would be nearly $175,000.  If your rate were 8%, the loan amount would be a bit less than $150,000.

As part of this calculation, you also need to estimate and include the property taxes, homeowner's insurance, Homeowner Association fees [if any], which are considered part of your monthly expense.   

Begin the home buying process by using my mortgage calculator to determine how much you can afford, or call me for a visit so that I can help analyze it for you!

I am aware of many financing options for little or no money down for qualified Buyers... give me a call today for an informative appointment!