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How to Increase the Mortgage You Qualify For

How can you increase the mortgage amount you qualify for? My lender is telling me I qualify for a certain mortgage amount but I cannot afford to buy a home where I live with that size loan.

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

My first recommendation is that you contact multiple lenders to fully understand your mortgage options. One lender may qualify you for one loan amount while another lender may apply different guidelines and qualify you for a higher loan amount. You can review lenders in your area by clicking INTEREST RATES We advise you to contact at least four lenders as qualification guidelines vary. Additionally, different lenders may offer different mortgage programs that enable you to qualify for a higher mortgage amount, such as an adjustable rate mortgage (ARM) (although there are also risks with an ARM that you should consider). Plus, shopping multiple lenders is the best way to save money on your mortgage.

My second recommendation is that if you have a significant amount of debt such as credit card, auto and student loans, you should pay down your debt to lower your monthly debt expenses. While paying off all of your debt may not be practical, reducing your monthly debt expenses increases the mortgage amount you can qualify for. You can use our Mortgage Qualification Calculator to determine what size mortgage you can afford based on your monthly gross income and debt expense.

You should also check your credit report to make sure there are no items that are hurting your credit score. Your credit score is one of the factors that determines your mortgage rate, with the higher your score, the lower your rate. Identifying and addressing any issues on your credit report, such as accounts in collection or late payments, may increase your credit score, which can result in paying a lower mortgage rate which increases how much mortgage you can afford. We provide a comprehensive overview of your credit score and the mortgage process as well as a helpful explanation of how to improve your credit score before you apply for a mortgage that you can review. You can also review your credit report for free on websites like CreditKarma.com, Credit.com or AnnualCreditReport.com.

Finally, you may want to consider a low down payment mortgage program, especially if you use some of your savings to pay down your debt. We also provide a comprehensive summary of low / no down payment mortgage programs on FREEandCLEAR as well as a helpful comparison of these programs.

Borrowers can also combine a low down payment mortgage program with a down payment grant or a closing cost assistance program to buy a home with a little or no down payment and to help pay for closing costs. Closing Cost Assistance and Down Payment Grant programs are typically provided by HUD-approved local housing departments or commissions in conjunction with participating lenders. The housing commission may also offer additional home buyer assistance programs that may be applicable to you. I have provided a link to the HUD web site where you can select your state and click "Learn About Home Ownership" to be directed to information about mortgage assistance programs in your state. 

While none of the recommendations outlined above make housing in your area more affordable, they may help you qualify for a larger mortgage and afford more home.

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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