Is there an easy rule of thumb to determine how much money can be borrowed to buy a home?
Lenders look into your credit rating, debt/income ratio, and many other documents to determine how much you can borrow. In addition, loan qualifications have been changing over the last year or so. As a rule of thumb, youll need to determine your gross income (before taxes) for all people that will be on the loan (borrower and co-borrower). Multiply this number by 2 to 2.5 This will give you a general idea of what you might qualify for. If you have a large down payment combined with little to no debt, the lender may believe that you can afford a more expensive home than this rule of thumb.
