How does a lender determine how much money a home buyer can borrow?

I’ve been speaking with a home buyer who asked me to connect him with a mortgage person for a pre-approval.

A mortgage pre-approval is an important part of the home buying process, and the earlier the better.

By speaking with a lender, you’ll understand exactly what you qualify to borrow. This will give you credibility at the negotiating table, a protected interest rate, and guidance to substantially streamline the home search process.

Now, my broker pre-approved my client to buy a home worth $500,000. The client responded by saying, he has “a friend in the business” who told him he could spend up to $650,000.

This is not an indication that his “friend” has some pull that the first mortgage broker didn’t have, it’s an indication that someone has made a mistake.

The amount of mortgage money that you can qualify for is arrived at using mathematics.

It really is as simple as that.

In this video, I explain how these numbers work.

Thanks for watching.


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Norm Fisher

Royal LePage Vidorra


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