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Apart from having 1 year of work in the same company and a good credit score... Once that's okay... For example I earn $5000 a month, can I borrow $4500 a month if I want ? Or is there a limit based on a percentage of my net incomes a month ? And is there a limit on the duration of the real estate loan ?

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    This is probably more appropriate for the personal finance site. But, yes, for a conventional mortgage, there will be front- and back-end ratios that limit the amount of the mortgage and the amount of your total debt payments to a fraction of your income. Dec 19, 2022 at 19:12
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    I’m voting to close this question because it belongs on money.stackexchange.com Dec 19, 2022 at 19:33
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    To clarify, this question is asking about "mortgage underwriting" (i.e. the customary economic conditions to allowing someone to take out a mortgage loan). Questions about the usual terms and conditions of the mortgage itself once entered into might be pertinent in this forum.
    – ohwilleke
    Dec 19, 2022 at 19:36
  • These questions are influenced, in part, by legal banking regulations and informed by the history of government intervention in the mortgage banking industry, but neither of those issues are really responsive to this question.
    – ohwilleke
    Dec 19, 2022 at 19:53

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This is more of a bank policy question, but typically they won't loan you more than can be covered by around 30% of your income.

In your example, depending on current interest rates and the number of periods in the loan, (i.e. 15 or 30 years) your cap might be a monthly payment of $1500 per month.

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There are limits imposed by federal banking regulations on loans made by FDIC-insured banks, and on loans made that can be processed by FHA or other government programs. These limits were tightened after the wave of mortgage defaults in the 2000s.

But many, probably most, lenders have their own standards, often moire restrictive than federal regulations would require. These will vary from one lender to another, but will often be based on a percentage of the borrower's income, perhaps nor permitting a loan for which the payment would be more than say 25% or 30% of the borrower's income. length of the loan, value of the property, and the loan-to-value ratio will all influence this to some degree, as will the borrower's credit standing and history.

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  • One of the main changes arising from the Financial Crisis of ca. 2007-2008 was to prohibit commercial banks from making "hard money loans" which are based solely upon loan-to-value in the property, rather than upon evidence of a borrower's credible ability to repay the loan from income.
    – ohwilleke
    Dec 19, 2022 at 20:21

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