Leading into the 2008 crash, banks were giving out sub-prime mortgages.  That’s a mortgage where borrowers take out loans larger than what they can realistically pay, depending on the market to continue to grow.  Then they would build instant equity and refinance their home to something more manageable or sell before the big bills came due.  When the market collapsed, thousands of homeowners were foreclosed on, and banks and lenders lost millions.  Now, the mortgage market is more regulated, and will only lend you what you can afford to pay.  So how much can you borrow as your mortgage?

The keys to this question are all part of your financial picture.  Your credit score, current income, existing debts and expenses all count towards your ability to borrow money.  We have no desire at The Home Loan Expert offices to lend you more money than you can repay.  That’s bad business for us, and especially bad for you.  It’s why we take our time when doing your mortgage.  We will get you a pre-approval on a loan that you can take to your agent and put down an offer with, but we will dig into your finances and make sure that you can pay the loan off.  We look at your entire financial picture before we sign off on a loan, and that protects both of us.

When the housing market is on an upswing, like it is right now with interest rates near all-time lows and home values rising quickly, there is a temptation to borrow more and more money.  We try to curb this by lending you what you can comfortably repay.  We also go through every step of the process with you to ensure that you know what your liabilities are and don’t get any nasty surprises in the mail.

Remember, just because you can borrow a certain amount doesn’t mean that you can afford it.  If you like to take vacations every year, don’t borrow so much that you can’t afford to.  If you are planning on having children, plan for the additional costs and balance the need for a bigger home with the financial obligation.  We will help you with all of these calculations, but you have to make the call on your priorities.

Call The Home Loan Expert Team in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515, Nashville at (615) 810-8555 or Birmingham, AL at (205)721-7656.  You can always apply online at hero.loan for your VA Loan, and www.thehomeloanexpert.com for your other mortgage needs, and we’re also open on Saturdays and will come to you to help close your loan. We work hard to make it easy on you.  Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?

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