This page will determine your required income to purchase a $350,000 home. It assumes a fixed-rate mortgage.
A good rule of thumb is to limit your mortgage payment to no more than 28% of your pre-tax income. What is the income needed to buy a $350,000 house?.
Monthly housing payment (PI TI )
This represents your total monthly Principal, Interest, Tax, and Insurance (PITI) payment. Your principal, interest, property taxes, homeowners’ insurance, association dues or fees, and principal mortgage insurance (PMI) are all included in this. Maximum monthly payment (PI TI ).
Maximum principal and interest (PI)
This is your maximum monthly principal and interest payment. It is calculated by deducting your monthly PITI payment from your monthly taxes and insurance. This calculator uses your maximum PI payment to estimate how much you might be able to borrow.
Start interest rates at
The current interest rate you could receive on your mortgage. When displaying a range of interest rates and the resulting mortgage amount, this serves as the starting point.
The length of time you have to pay back this loan The most typical mortgage durations are 15 and 30 years.
The amount you expect to pay in property taxes. This is normally paid either semi-annually or annually.
The amount you expect to pay for hazard insurance. This is normally paid either semi-annually or annually.
Association dues or fees
The monthly fee for a homeowners association or other required service that you anticipate paying This is normally paid monthly.
Monthly cost of Private Mortgage Insurance (PMI). PMI is estimated to be 0 for loans secured with less than 20% down. 5% of your loan balance each year.
Calculating Your Mortgage Payment
Short of speaking with a lender, this mortgage calculator can provide answers to some of the most difficult questions in the home-buying process, such as what kind of payment I can afford, how much I need to earn to qualify for a $500,000 house, and how much I can get with my current income.
Were able to do this by not only considering the loan amount and interest rate but the additional factors that affect your ability to qualify for a mortgage. We include your other debts and liabilities that have to be paid each month and costs like taxes and homeowners insurance that are part of the monthly mortgage payment. Doing so makes it easy to see how changes in costs and mortgage rates impact the home you can afford.
While using a calculator to calculate the size of the mortgage is an important step, it won’t be as accurate as speaking with a lender. To find out exactly how much you can afford, get pre-approved with a lender today.
Mortgage Required Income Calculator FAQs
The questions we frequently get about affordability and the required income calculator are listed below.
What percentage of income do I need for a mortgage?
Youve got a home or a price range in mind. Our calculator helps take some of the guesswork out of calculating a reasonable monthly mortgage payment for your financial situation. You think you can afford it, but will a mortgage lender agree?
Compared to borrowers, mortgage lenders tend to have a more conservative idea of what is affordable. They must because lenders are obligated to see that the mortgage is repaid.
Lenders must consider all of your debts, including those that deduct from your monthly income in addition to your mortgage payments.
Determining this comes down to the debt-to-income (DTI) ratio. DTI measures how much of your pre-tax income is used to pay off all of your debt. A common guideline for DTI is not using more than 36% of your monthly pre-tax income to pay off debt or fulfill other commitments, such as the mortgage you’re after.
Certain lenders and loan types might permit DTI to go over 41%. In these cases, the borrower typically receives additional financial scrutiny.
When calculating your debt-to-income ratio, lenders also consider what makes up the entire mortgage payment, including property taxes, homeowners insurance, mortgage insurance (if applicable) and condominium or homeowners association fees.
What else is included in DTI?
Your debt-to-income ratio also takes into account any monthly obligations you have, such as alimony, child support, minimum credit card payments, installment loans, student loans, and auto loans. It typically excludes recurring monthly fees for things like utilities, internet, cable or satellite TV, mobile phone subscriptions, or other costs for ongoing services or other things where the expense is incurred anew each month.
The lender compares your projected monthly mortgage payment to your monthly income after taking into account all of your monthly debt payments, including credit card bills, other loans, and any alimony or child support obligations. You’re usually in good shape if your debt payments represent less than 36% of your gross income before taxes.
If your income fluctuates from month to month, your lender will likely base their decision on your average monthly income over the previous two years. But if you had a year with significantly higher earnings than the other, the lender might choose the year with the lower earnings average.
Not only does your required income depend on the size of your loan and the amount of debt you owe, but also on your mortgage rate and the term of your loan. You can consider them in the mortgage income calculator since they have an impact on your monthly mortgage payment.
Using the Mortgage Income Calculator
Enter the desired loan amount, anticipated mortgage rate, and loan term in the spaces provided to get started. You’ll see that the blue box at the top of the calculator immediately displays the necessary income as well as a calculation of the monthly mortgage payment.
Note that you can adjust the loan amount and interest rate by using the sliding indicators; left-click and hold on the green triangles to adjust the figures. As you do, the required income level and monthly mortgage payment will immediately change as well.
You can also input monthly obligations and housing costs into the calculator. The plus () and minus (-) symbols on the right side of the column can be used to display or hide these sections, respectively.
Nota Bene: You must enter your information under “housing expenses” further down; do not enter it here for tax payments, homeowners insurance, or any other fees listed on your mortgage statement.
Your minimum required monthly payments for obligations such as auto loans, credit card balances, student loans, child support, and other liabilities are entered in your monthly liabilities. Enter only the required amount, not any additional money you might voluntarily contribute.
If you have a co-borrower and you both have different liabilities, enter the same information.
Note: Don’t enter utility bills, cable or satellite TV, Internet service, or other recurring expenses; monthly liabilities is for debts and other payments you are legally required to make.
The required income and monthly loan payments in the blue box will change right away if you change these numbers using the sliding triangles, just like you can with the loan amount and interest rate.
Property taxes, homeowners insurance, homeowners association dues, and private mortgage insurance (PMI) or FHA mortgage insurance, if applicable, are among the additional expenses that are typically included in your monthly mortgage payment. Use the worksheet indicated to enter estimates for those figures.
Recall that you will only be required to pay mortgage insurance if you put down less than 20% of the home’s value.
Mortgage insurance typically costs 0.5 – 1.85 percent of your loan amount per year, billed monthly, though it can go higher or lower depending on your credit score, down payment and length of your loan.
Required annual income for a variety of interest rates
With the help of this feature, you can see how different interest rates affect the amount of income needed to qualify for a given home loan. The rate you chose in the calculator is the lowest rate in the table.
When you click “View Report,” a page with a summary of the data you’ve provided and a table outlining the required income for your loan at various mortgage rates will appear.
Other Mortgage and Financial Calculators
This page gives you access to more than 100 other financial calculators, covering a wide range of situations in addition to the standard mortgage calculator. Choose from calculators that address a range of topics, including taxes, retirement planning, investments, student loans, auto loans, and more.
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