How does one determine how much of a mortgage they can qualify for?

Question

I make about 400k/year and I am eyeing a home that costs about 1.1million... I have good credit and no other significant costs, but this is my first home purchase... is it likely I can qualify? If there is anyone who works in finance and knows anything useful about obtaining a mortgage, I would greatly appreciate it. Thanks!

Answer 1

The middle class are suggested to keep their housing expense to 30% of their gross income. For you that is $10,000.

$1,100,000 Purchase Price
$220,000 Down Payment
$880,000 Loan Amount
$6,381 Payment @ 7.875%
$1,000 Taxes
$250 Hazard Insurance
$7,631 Total Monthly Housing Payment

You seem to be well within your price range.

Answer 2

Check with mortgage companies to find out what their lowest rate is. When you find one that has reasonable rates, have them run a credit check and find out how much you qualify for. Then ask for a prequalification letter. Then you can start looking. I suggest that you get a realtor because they will handle inspections, price and inclusive items negotiations, contract requirements, and closing. You will be required to make a down payment of at least 20% plus the cost of the closing, insurance etc...