There are several factors that lenders take into consideration when determining how much they will lend to you for your home purchase. The three most important factors are your income, debts, and down payment. Any one of these factors can greatly impact the amount of mortgage you qualify for. As a general rule, no more than 28 percent of your gross monthly income should be going towards your monthly housing payment and no more than 36 percent of your income should be going to your housing payment plus other monthly debt. These guidelines vary by the amount of down payment you make and the loan program you choose.
If you have been pre-qualified and are not satisfied with the amount you qualify for, we’ve listed four of the most common obstacles to qualifying for a home loan and some possible solutions to each.
1) Excessive Long-Term Debt
2) Inadequate Income
3) Credit Problems
4) Lack of a Down Payment