[stillbourne]

I make $70k a year, I have a credit score of 814 the bank won't give me a loan for more than $175k. The cheapest housing in my metro area is about $300k. It doesn't matter that a the cost per ft^2 is stable or that a $300k loan is @ 4% when I can't get a $300k loan.

[horsawlarway]

If you can't get a 300k loan with 70k income there's something else going on.

Either you have no down payment, you have a large pre-existing debt, or you have some other monthly cash drain.

at 70k annually you make ~5.8k a month.

36% debt to income ratio is normally acceptable, so you can afford 5.8 * .36 = 2.08k a month in payments.

That's a 400k loan at 4.5% interest with a 30 year term.

To be safe, and include insurance, taxes, other - you should be able to get a loan for 350k fairly easily.

That you're capped at 175 implies you have some other form of monthly debt in the $1100 range. Child support? College loans? Other?

---

I'll edit this to add: I don't personally recommend taking the maximum loan you qualify for. It's a good way hamstring your ability to continue to save and invest, and it makes it more likely that an abrupt job loss or change of financial circumstances puts you in a bad spot.

[stillbourne]

~5.8k? Maybe pretax, my month to month is more like 3.5k after taxes, insurance, 401k, and other withholdings. I've paid off my CC debt, no student loans, no alimony or child support. I have a car loan of about $500 a month for $20k that I am currently aggressively paying off @ $1000 a month. But what I was approved for was before I got the car. I do not have a down payment though, the rent here takes up half my pay check.

[wil421]

Mortgages are usually based on gross income not net income.

[cheald]

That suggests to me that your existing debt-to-income ratio is too high. The conventional limit lenders will consider is a 36% pre-tax debt-to-income, including mortgage obligations. If a lender won't consider more than $175k, that suggests you probably have substantial existing debt obligations. If you don't, ask around to find another lender. Realtors generally have brokers they work with and recommend.

[stillbourne]

I don't know how to make the calculation that you are describing.

[cheald]

Add up all your monthly debt service obligations (credit cards, student loans, car payment, etc - use the minimum payment). This is your current debt obligation.

Your pretax monthly income is $5833. 36% of that is $2100. The maximum a lender will loan you will result in a monthly payment of ($2100 - your current debt obligation).

For example, if you have $1k/mo in debt service, you have $1100 margin left in your debt-to-income ratio for a mortgage. At 4%, that's a maximum mortgage amount of roughly $145k.

If you have all $2100 to allocate to the mortgage, that allows a mortgage in the $300k range, varying with property tax and insurance rates.

https://www.bankrate.com/calculators/mortgages/new-house-cal... is a handy tool for figuring out how much mortgage you can afford. https://usmortgagecalculator.org/ is another good resource.

[Spooky23]

Don’t go to the bank go to a broker.

You can get a (not so great deal) loan with much higher limits.