What's a good salary to qualify for a home loan?
How much home loan do I get on my salary? Or, more generally, what’s a good salary to qualify for a home loan? It depends on the cost of living in your area and your personal budget. To find out how much home loan you can get on your salary, it’s important to know the average household income in your area and how far that income goes in your area.
Calculate your home loan based on your gross salary
Every bank has its own set of rules, but home loans are based on a percentage of your gross annual income. To calculate how much you could borrow based on your gross annual income, use Bankrate’s mortgage calculator. For example, if you earn $50,000 in gross annual income and want to spend no more than 30 percent of your monthly gross income on housing expenses, you would be eligible for $200,000.
Are you ready to buy a home?
Before you start shopping around for your home loan, it’s smart to figure out what is affordable for you. Most lenders will base their qualification criteria on two numbers: your income and your credit score. While there are lots of other factors that go into qualifying, these are some of the most important ones. Let’s dive into each of them individually.
Decide how big you want the house
If you’re in the market for home loans, it helps to figure out how much you can afford. Use Bankrate’s mortgage calculator and enter your income, debts and assets. Click Show Monthly Payment Summary and Maximum Mortgage Amount to view your housing affordability ratio. This will give you an idea of how much house payment you can make each month based on your salary.
Buy your dream home
Finding your dream home is only part of your journey; you also need enough money in your bank account to buy it. How much do you need? There’s no universal answer, but there are several factors that determine how much home you can afford. Loan officers will look at things like your credit score, debt-to-income ratio and financial profile before determining how much home loan they can offer you.