How Much Can I Borrow?

• Home Loan Guide
• Knowing My Credit
• How Much Can I Borrow?
• Loan Information
• Further Assessment

Depending on your income, credit, current debt, and other factors, you will be able to borrow different amounts of money compared to others applying for the same loan. Before applying for a loan, you should have an idea of how much you realistically can borrow and how much you want to borrow. Here are some guidelines to help with your assessment:

How much can you borrow? - If you have good credit and believe that the loan payments will be well within your budget, you should be able to borrow that amount of money. However, if you have bad credit, you should not expect to be able to borrow as much money as you need. The amount of money that you can borrow will vary considerably between lenders. If you are serious about applying for a loan, your best choice is to apply to a company that has lenders that are competing for your business. By doing this, you can get several assessments of your creditworthiness in one step. Also, since different lenders are seeking different types of investments, your loan can be worth double the amount to one lender as opposed to another. It is difficult to determine how much you can realistically borrow until you actually apply for a loan. Don't be discouraged until you have thoroughly explored all your options. For instance, say a person wanted to get a first-time home loan. When the person applied at his local bank, the person was told the bank would lend him $50,000. Discouraged, the person almost decided to not go through with it. However, in a last attempt, the person used an online service that included various lenders competing for the person’s business. By doing this, the person realized that over $100,000 could be borrowed. The reason being is that mortgage companies are more lenient than banks. Also, certain mortgage companies especially need a specific type of loan to balance out their portfolio.

How much do you want to borrow? - You should have an idea of how much you want to borrow before applying for a loan, particularly if it is a second mortgage, home equity loan, or a home equity line of credit. If you have excellent credit, the lender will most likely offer you more money than you were expecting. Do not feel obligated to take the higher offer. In the event that this happens, only accept a loan for the amount of money you really need. By accepting higher loans, you are subject to spending the additional money on unnecessary items. Also, you may also have to pay interest on unused lines of credit or on money you would not have borrowed originally.

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