What is a Mortgage Affordability Analysis?
Mortgage affordability (sometimes called “fundability”) is the amount you can borrow in relation to your income, debts, and monthly expenses.
In essence, it represents your buying power when purchasing a home. Higher mortgage affordability allows you to buy a more expensive property.
The maximum mortgage you can afford to borrow depends on a variety of criteria.
Here are a few factors:
Income
Money that you receive on a consistent basis, such as your wage or investment returns. Your monthly budget is largely determined by your income.
Cash reserves
This represents the amount of funds you have available for a down payment and closing costs. This includes your investments, savings, or other funds.
Expenses and debt
Your monthly obligations, such as credit cards, auto payments, student loans, groceries, utilities, insurance, and so on.
Credit profile
How a lender sees you as a borrower depends on your credit score and how much debt you have. These factors will impact your mortgage interest rate and loan amount.
At Budget Rates, we can conduct an in-depth affordability analysis for you, and give you tips on how to increase your buying power.
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