1. What is the Eligibility Amount?

The Eligibility Amount is the maximum loan amount you may qualify for based on your income, the lender's multiplier, and your existing monthly debt obligations. It helps determine how much home you can afford.

2. How Does the Calculator Work?

The calculator uses the eligibility formula:

Where:

• \( Income \) — Your gross monthly income
• \( Multiplier \) — Lender's risk assessment factor (typically 3-5)
• \( Debts \) — Your total monthly debt payments

Explanation: The equation accounts for your ability to repay by considering your income against existing obligations, with the multiplier reflecting the lender's risk tolerance.

3. Importance of Eligibility Calculation

Details: Calculating your eligibility amount helps set realistic expectations when house hunting and prevents you from looking at properties outside your budget range.

4. Using the Calculator

Tips: Enter your gross monthly income (before taxes), the lender's multiplier (ask your bank), and all monthly debt payments (credit cards, car loans, etc.). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical multiplier value?
A: Most lenders use multipliers between 3-5, with 4 being common. Higher multipliers indicate more lending risk tolerance.

Q2: Should I include taxes in my monthly income?
A: Use gross income (before taxes) as lenders typically consider this amount in their calculations.

Q3: What debts should I include?
A: Include all recurring monthly debt payments: credit cards, car loans, student loans, personal loans, and other mortgages.

Q4: Does this include the down payment?
A: No, this calculation shows the loan amount you may qualify for. You'll need additional funds for the down payment (typically 10-20%).

Q5: Is this the final loan amount I'll get?
A: This is an estimate. Final approval depends on credit score, employment history, property value, and other lender-specific factors.