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How Much Should Your Income Be?

What income is required to qualify for a mortgage? That largely depends on your monthly debt payments and the current interest rate. This calculator collects these important variables and determines your required income to qualify for your desired mortgage amount.

Definitions

Desired mortgage amount

The total loan amount you are looking to qualify for.

Monthly housing expenses

Your monthly houses expenses from the housing expenses worksheet. The items entered as housing expenses make up the taxes and insurance portion of your monthly PITI payment.

Monthly liabilities

Your monthly liabilities from the liabilities worksheet. Your monthly liabilities are used to calculate your maximum PITI.

Monthly housing payment (PITI)

This is your total Principal, Interest, Tax and Insurance (PITI) payment per month. This includes your principal, interest, real estate taxes, hazard insurance, association dues or fees and principal mortgage insurance (PMI). Maximum monthly payment (PITI) is calculated by taking the lower of these two calculations:

1. Monthly Income X 28% = monthly PITI
2. Monthly Income X 36% - Other loan payments = monthly PITI

Maximum principal and interest (PI)

This is your maximum monthly principal and interest payment. It is calculated by subtracting your monthly taxes and insurance from your monthly PITI payment. This calculator uses your maximum PI payment to determine the mortgage amount that you could qualify for.

Start interest rates at

The current interest rate you could receive on your mortgage. This is used as the starting point for displaying a range of interest rates and the resulting mortgage amount.

Term in years

The number of years over which you will repay this loan. The most common mortgage terms are 15 years and 30 years.

The mortgage calculators are provided by KJE Computer Solutions, LLC and made available to NUMBER1EXPERT as self-help tools for your independent use and are not intended to provide investment advice. We can't guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

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First Time Buyers >Credit Card Common Sense If you are buying a home for the first time, you need to establish a reasonably good financial foundation before a lender will approve you for a mortgage loan. Lenders look for a good credit rating, sufficient funds to make the initial down payment and pay the closing costs, and a stable employment situation. People who have just qualified for a mortgage loan are usually in better-than-average financial shape. If you have recently purchased a new house, don't be surprised if you receive numerous offers from retail stores and other credit card companies offering you pre-approved revolving credit. Be careful about accepting these offers! New home owners often use most of their savings in the process of financing the transaction, and they need everything from linens to furniture to get settled in the home. With all of the immediate credit available, it may be very tempting to just say "charge it." If you're not careful, you could be "up to your ears" in debt very quickly. It takes discipline to reach the goal of home ownership--and it takes that same kind of discipline to maintain financial health after you leave the closing table. See All Tips In The "First Time Buyers" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories >

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