Understanding Which Mortgage is Best for Your Income

picture7Two of the most important things that would be looked at when you try to get a mortgage for a new home are your credit history and your annual income. Your credit history would tell your potential lender whether you’re capable of repaying such a large loan. Your gross earnings would tell you which interest rate would be feasible.

For a four percent interest rate, you have to show that you only earn $21,000 a year. If however you earn $46,000 a year, your interest rate would be hiked up to 12%. Most people fall into the middle ranking of $33,000 a year, so most interest rates approved are at 8% or 7%.

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