Before making an offer on a house, it is important to know how much you can borrow. Buyers often also request an official statement proving that you can finance the property. Within this topic, there are two important concepts we discuss: the loan amount and the mortgage statement.

The loan amount is the maximum amount you can borrow. This is based on your personal financial situation. Factors that play a role include:

• Your gross annual income.
• Fixed expenses, such as debts or alimony.
• The current interest rate.
• The duration of the mortgage.
• Any personal savings or capital you contribute.

A mortgage advisor or bank can calculate this amount for you, but there are also online calculators that give you a good indication.

A mortgage statement, also known as a financing statement, confirms that you are (conditionally) able to finance the property. Sellers or real estate agents often ask for this document.

The statement typically includes:

• Your name

• The amount you’re able to finance

• A note that it is subject to final mortgage approval

This statement is issued by a mortgage advisor or bank after an initial financial assessment.

Important: It’s not a binding offer yet but it is a serious indication.

• Stronger position when making an offer: With a mortgage statement, you show that you’re serious and that your offer is financially backed.
• Faster buying process: If your offer is accepted, there’s less to figure out. Since you already have a clear indication of how much you can borrow.
• Less risk for the seller: The seller sees you’re a serious buyer, which increases the chances your offer will be accepted.