When it comes to closing on a new home purchase, few things can expedite the process more than getting preapproved for a mortgage. And in housing markets where buying competition leads to quick closings, preapproval is crucial and ensures that sellers take your offer seriously.
Seeking preapproval is a smart move, but it pays to understand the difference between how much house you can afford and how much lenders are willing to let you borrow. The two rarely align.
That’s why Motley Fool analysts Kristine Harjes and Nathan Hamilton discuss in the following video the debt-to-income ratio and how banks use it to size up homebuyers for a new mortgage. Understanding these factors could help you crush budgeting goals, so tune in to ensure you’re on the right path.
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