 TITLE: Do I Earn Enough to Afford a $200,000 Mortgage? CONTENT: What Income Do I Need to Qualify for a Mortgage?\n------------------------------------------------\nTo illustrate how some of these variables can interact to determine your income requirements, consider the example of a 30-year fixed mortgage on a home with a $230,000 market value, for which you're prepared to make a 13% down payment of $30,000—leaving a mortgage amount of $200,000.\nAt an interest rate of 4.8% (a bit higher than the current national average of 3.99%), your monthly payment (including PMI, which is necessary when you put down less than 20% of the purchase price) would be about $1,680.\nBased on the 28% rule, which, requires that $1,680 payment to account for no more than 28% of your gross monthly income, you'd need a monthly income before taxes and other deductions of at least $6,000, or an annual gross income of at least $72,000, to qualify for that mortgage:\n$1,680\n\\=\n28\n\\[Minimum gross monthly income\\]\n100\nMinimum gross monthly income = $6,000; minimum annual gross = $72,000\nAs long as any monthly debt payments you have in addition to your mortgage payment are $480 or less, that annual income of $72,000 will also satisfy the 36% rule:\n$1,680 + $480\n\\=\n36\n\\[Minimum gross monthly income\\]\n100\nMinimum gross monthly income = $6,000; minimum annual gross = $72,000\nIf your monthly non-housing debts are greater, however, your total debt payments will exceed 36% of gross income and you'll need income to qualify for the mortgage.\nMonthly debt expenses of $600 in addition to the mortgage payment would require a gross monthly income of $6,333 or an annual income of $76,000, for example:\n$1,680 + $600\n\\=\n36\n\\[Minimum gross monthly income\\]\n100\nMinimum gross monthly income = $6,333; minimum annual gross = $76,000\nMonthly debt payments of $750 in addition to the mortgage would require annual income of $81,000.\n$1,680 + $750\n\\=\n36\n\\[Minimum gross monthly income\\]\n100\nMinimum gross monthly income = $6,750; minimum annual gross = $81,000 END