The Marquee Loop, Mortgage Myths: Only income determines how much you can borrow
Myth: Only income determines how much you can borrow
This is a common myth about mortgages, but it is not entirely true. While your income is an important factor that lenders consider when deciding how much you can borrow, it is not the only factor.
Lenders also take into account your credit score, debt-to-income ratio, employment history, and the value of the property you are purchasing. Your credit score reflects your creditworthiness and your ability to manage debt, while your debt-to-income ratio compares your income to your existing debts.
Your employment history is also important, as it shows lenders that you have a stable income and are likely to continue making payments on your mortgage. Finally, the value of the property you are purchasing will affect the amount of your loan.
Overall, while income is certainly a key factor, lenders take a more holistic approach when evaluating mortgage applications, considering a range of factors in order to determine how much you can afford to borrow.