How much house your income carries.
Lenders look at one ratio first: what your debts take from your gross income each month. Work back from it to the highest price, and see where you land.
Highest price at your DTI line
- Most the housing payment can be
- $3,800.00
- Principal and interest
- $2,945.95
- Property tax and insurance (1.45% a year)
- $659.85
- PMI
- $194.20
- Monthly payment at this price
- $3,800.00
Your debt-to-income at this price
- Gross income a month
- $10,000.00
- Housing ÷ income (front-end)
- 38%
- All debts ÷ income (back-end)
- 43%
Common: within the usual 43% line.
Two things to plan for
- Keep about $16,382 for closing costs on top of the down payment (3% of the price).
- Your $500 a month of debts lowers the price by $62,927. Paid off, the ceiling is $609,009.
How lenders size a mortgage
Lenders compare your monthly debt payments with your gross monthly income. The back-end debt-to-income ratio counts the new housing payment plus every other debt; for a conventional loan, 43% is the common line, 36% or under is comfortable, and above 50% few programs go.
This calculator works back from that line: income × the line, less your debts, is the most the new housing payment can be. The price is the highest one whose payment (principal and interest, property tax at 1.1% and insurance at 0.35% of the price a year, and PMI under 20% down) fits inside it.
Lumpy income
A lender counts a bonus or commission only with a history, usually a two-year average. RSUs often don’t count at all. Enter the income a lender would see, not the best year.
Next: the monthly payment at a price, or the cash you’ll need to close.
An estimate to plan with, not a Loan Estimate, a pre-approval or advice. Lenders, counties and insurers set the real figures; check them before you act.
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RichDue reads your income sources, debts and house fund, so the price and the month you can buy come from your numbers instead of a guess.