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How Much Money Should I Borrow for my Home Loan?

How much money should I borrow for my new San Diego home loan? While it might be tempting to borrow the amount of money your mortgage lender is willing to give you, it is very important to decipher how much you will actually need to borrow in order to purchase your new home. From the amount you will need for the down payment, the closing costs, for property taxes and the home owners insurance, there are many factors to consider when making probably the largest financial decision you will ever make for your new San Diego home loan.

What may surprise you, is that there is no exact formula for accurately calculating the dollar amount you should borrow when purchasing your new home. But many economists agree that you should only borrow more than 2 1/2 to 3 times your annual income, or that 28% to 40% of your income is the maximum amount of debt that you should ever take on for a mortgage.

Now while these calculation insights may help you in your thinking of the overall loan process, i believe meeting with a professional mortgage planner and getting properly pre-approved for your loan is really the only way to know exactly the amount of money you really can afford and can qualify for. By getting properly approved, you not only improve the odds of finding the perfect home, but you now also become a “cash buyer” that increases your bargaining position imensely.

As a professional mortgage planner, i see my role much differently than a typical loan officer. Not only is my job to match your profile with the best mortgage available, it is also my role to make sure that this is the most responsible loan product for you as well that suits your goals and needs. That is why we have our detailed mortgage concierge program, that will go over in detail your goals and plans for the next 10-20 years.

I hope you now are more aware of the amount of money you may need to borrow for your new San Diego home loan. Some lenders will offer you the maximum amount of money that you may qualify for, whether you actually need the whole amount or not. This is why it is very important that you sit down with a professional mortgage planner that you can trust, who will help you decipher the amount you can afford for your new purchase.

If you or someone you know could benefit from this type of free consultation, give me a call. I would be happy to assist you!