Mortgage loans from banks

2 Replies

Is it true that banks will loan possibly four times your income for loan amount.

Ex. If you make 30k a year they give you $120k?

@Precious Thompson banks are normally looking at your DTI (debt-to-income) ratio when determining what size of loan you qualify for.  Take all of your current debt and future PITI payments, and divide that by your income.  Normally, banks are looking for a DTI ratio in the low 40's (when taking into consideration all of your debts and mortgages, not just the future mortgage), although I've seen DTI's been approved in the 50's range with compensating circumstances (high income, substantial assets, excellent credit, etc)

Originally posted by @Precious Thompson :

Is it true that banks will loan possibly four times your income for loan amount.

Ex. If you make 30k a year they give you $120k?

More goes into DTI than just income, for example that works for Sally with no car payment, but doesn't work for Jimmy with a $500/mo Tesla.

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