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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.
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Definitions
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- Desired mortgage amount
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The total loan amount you are looking to qualify for.
- Monthly housing expenses
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Your monthly housing 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
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Your monthly liabilities from the liabilities worksheet. Your monthly liabilities
are used to calculate your maximum PITI.
- Monthly housing payment (PITI)
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This is your total Principal and 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:
- Monthly Income X 28% = monthly PITI
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Monthly Income X 36% - Other loan payments = monthly PITI
- Maximum principal and interest (PI)
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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.
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Information and interactive calculators are made available
to you as self-help tools for your independent use and are not intended to provide
investment advice. We can not and do not 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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