When you apply for a loan, your mortgage lender informs you of the maximum amount you can borrow, and this will help you get an idea of how much house you can afford. The question most buyers ask is how they reach this amount and what factors influence their decision?

Read on to understand the most common factors that lenders look at to know how much you can borrow.

1.) Gross Income

Most lenders prefer monthly mortgage payments don’t exceed 28% of your gross monthly income. At this percentage, they estimate a borrower will not stretch their budget too far and pay the loan without missing any payments.

Your gross monthly income is the amount you earn before deductions and other obligations, including social security, taxes, child support,