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Lock in a low interest rate and get cash out by doing a comb...

Home equity lanes are a nice option for consolidating higher...

Home equity lanes are a nice option for consolidating higher...

Lock in a low interest rate and get cash out by doing a comb...

Home equity lanes are a nice option for consolidating higher...

How uch do I have to earn?

Mortgage Calculators - How much do I have to earn?

   Mortgage calculators  /  How much do I have to earn?

Not sure how much money you'll have to earn per year to afford your house payment
and accompanying expenses? Simply fill in the boxes below, and we'll tell you.

How much do I have to earn?
Total Home Mortgage Amount: $
Annual Interest Rate: %
Term of the Loan: years
Annual Real Estate Taxes: $
Monthly Debt Obligations: $

When planning your next home purchase, it is important to know ratios are used by mortgage companies to determine how much you can afford for a mortgage payment. Two different ratios are used to make this determination:

  • Debt to income ratio
  • Housing to income ratio

Debt to Income Ratio
Your debt to income ratio is determined by calculating your total amount of monthly debt obligations, including your monthly mortgage payment as well as other payments such as:

  • Credit cards
  • Car payments
  • Student loans
  • Personal loans
  • Child support
  • Alimony

The total monthly debt is then compared to your total income to arrive at a ratio. For example, if you earn $3,000 per month and have $900 in monthly debts your debt to income ratio is 30%.

Housing to Income Ratio
The housing to income ratio consists of all your housing costs in relation to your income. Housing costs include:

  • Principal
  • Interest
  • Property taxes
  • Insurance
  • Mortgage insurance
  • Association dues

An individual with monthly housing costs of $960 and a monthly income of $3000 would have a housing to income ratio of 32%.

If, after, calculating how much you would need to earn to qualify for the purchase price of your desired home, you realize you may not earn enough, be aware there are ways you can rectify the situation. Maximum ratios are determined by each individual lender. Some lenders allow higher ratios than others. MortgageLenders.org can help you find a variety of lenders to meet your financial needs.

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