Affordability vs. Qualification: Just because you are approved for a huge mortgage doesn’t mean it’s the right choice.

For many first-time home buyers, this is how the mortgage process typically begins: a young couple walks into their local bank and tells them they want to buy a house and need to know how much loan they qualify for. The loan officer asks them a bunch of financial questions about their income and debt; and runs their credit report. Then, after crunching all the numbers announces that they can qualify for a huge mortgage. The couple looks at one another and one of them cringes and starts sweating thinking about how big the payments are going to be and the other does the happy dance dreaming of the posh beach house that will soon be theirs. Sounds great, right? Not so much.

There is much more involved in deciding what size mortgage is best for you and your family. Yes, you may qualify for a large mortgage but that doesn’t mean it’s the right thing to do. There is a difference between how much you can qualify for and how much you can afford.  With the right knowledge and education you can  determine what’s best for you, your family, and your financial future. The last thing you want is for your American Dream to become a financial nightmare, which is what can happen if you fail to properly consider mortgage affordability. What’s involved in determining how much home you can qualify for and afford? Here are some of the items to consider:


Put simply, how much mortgage you can qualify for is based on your ‘willingness and ability to pay.’ How is that determined? Your willingness to pay is largely determined by looking at your credit history and credit score and whether you’ve been good at paying your bills in the past.

When it comes to determining your ability to pay lenders will look at your income and assets, as well as your current liabilities, or what you owe to others. For instance, if you owe a bunch of money to other creditors, your ability to pay is reduced.

Also factored in are your home purchase plans, like the type of property you are looking for (i.e., single family home, condo, apartment, etc.); and whether it will be your primary residence or a vacation home or investment property.

All of these factors taken together help to determine the maximum mortgage loan you can qualify for. However, this isn’t where the story ends. As a borrower you must always consider affordability. How do you do that?


We all have financial obligations beyond the credit report; like medical expenses, insurance, child-care, and tuition costs; not to mention dreams and aspirations like traveling, hobbies, education, and retirement (some day!). Affordability is determined by considering these many factors that make up your financial picture.  Affordability largely considers whether you can sleep at night, whether you are comfortable with your home purchase; and making sure that your home fits into your family’s priorities.

Also, each person is different in how much risk one is comfortable with. Having a mortgage and owning a home involves risk (and tons of rewards too!). Exploring these items and coming to a realistic and holistic view of your financial and personal situation, goals, and priorities will only benefit you. Going through an affordability analysis empowers you to make a much wiser, informed decision about what kind of mortgage best suits you, your family, and your future.

So, before you sign on for a long-term mortgage be sure you really understand the difference between qualification and affordability. Being able to afford your new home will result in a much happier and less stressful experience so that you can sleep comfortably and enjoy your piece of the American Dream.

FREE eBook: The Qualification Vs. Affordability Debate
I Qualify, But Can I Afford It?

If you’re ready to see how SnapFi can help you buy a home please get in touch with us today.

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