Setting Realistic Homebuying Goals
One of the key responsibilities of our Mortgage Analysts is to help buyers establish realistic homebuying goals based on their income, assets, and market conditions.
For example, a buyer earning $6,000 per month generally should not be targeting homes in the $700,000 range unless she has over $300,000 available for a down payment.
Understanding these parameters is especially important in today’s market, as both interest rates and monthly housing costs have increased compared to prior years.
Estimated Income Requirements by Price Point
The table below illustrates minimum estimated income levels needed to qualify for various home prices, assuming both Conventional and FHA financing.
(Figures are rounded and for educational purposes only.)
These estimates assume:
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A “no points” rate of 4.75%
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A 1.25% property tax rate
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Minimal consumer debt
Actual qualification will vary depending on down payment amount, credit score, debt-to-income ratio, property type, and local tax or HOA obligations.
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