Score: 4.2/5 (33 votes)

Conventional mortgages, like the traditional 30-year fixed rate mortgage, usually require at least a **5% down** payment. If you're buying a home for $200,000, in this case, you'll need $10,000 to secure a home loan.

A $200k mortgage with a 4.5% interest rate over 30 years and a $10k down-payment will require an **annual income of $54,729** to qualify for the loan. You can calculate for even more variations in these parameters with our Mortgage Required Income Calculator.

The “20 percent down rule” is really a myth. Typically, **mortgage lenders want you to put 20 percent down on a home** purchase because it lowers their lending risk. It's also a “rule” that most programs charge mortgage insurance if you put less than 20 percent down (though some loans avoid this).

For a home price of $250,000 the minimum down payment would be **$8,750**. Your credit score is too low to qualify for a mortgage.

The minimum down payment to buy a home with an FHA loan is just **3.5 percent** of the home's purchase price. That means the down payment for, say, a $250,000 home would be $8,750 with this type of loan.

Money needed for a $250,000 house

To buy a $250,000 house, you'd likely need to pay **at least $16,750 upfront for a conventional loan**. Upfront costs could be as low as $6,250 with a zero–down VA or USDA loan, though not all buyers qualify for these programs.

How Much Income Do I Need for a 500k Mortgage? You need to make **$153,812 a year** to afford a 500k mortgage. We base the income you need on a 500k mortgage on a payment that is 24% of your monthly income. In your case, your monthly income should be about $12,818.

A down payment: You should have a down payment equal to 20% of your home's value. This means that to afford a $300,000 house, you'd need **$60,000**. Closing costs: Typically, you'll pay around 3% to 5% of a home's value in closing costs. On a $300,000 home, you'd need $9,000 to $15,000.

Assuming a $150,000 purchase price, this means you will need a minimum down payment of **$5,250**.

You have $25,000 in savings to make a down payment, covering **10%** of the home's value. ... Conventional wisdom might tell you to put down at least 20% of the home's value, and that may be right for those with significant savings or an existing home to sell.

When saving up for a home, it's key to have a reserve of cash savings — or an emergency fund — that isn't used for the down payment or closing costs. It's a good idea to have **at least 3-6 months of living expenses saved up** in this cash reserve.

For example, if a mortgage lender requires a 3 percent down payment on a $250,000 home, the **homebuyer must pay at least $7,500 at closing**. A down payment reduces the amount the buyer needs to borrow to buy the home.

In parts of the country with higher costs of living, $200,000 **is only enough to buy a home the size of a studio apartment** – or less. In other parts, $200,000 can get the buyer a home around 50 percent larger than the typical 1,800 square foot American home.

The Income Needed To Qualify for A $500k Mortgage

A good rule of thumb is that the **maximum cost of your house should be no more than 2.5 to 3 times your total annual income**. This means that if you wanted to purchase a $500K home or qualify for a $500K mortgage, your minimum salary should fall between $165K and $200K.

Qualifying for a mortgage when you make $20,000 a year or $30,000 a **year is absolutely possible**. While your income plays a role in a mortgage lender's final decision, it isn't the only financial factor a lender looks at.

It's recommended you have a credit score of **620 or higher** when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments.

While buyers may still need to pay down debt, save up cash and qualify for a mortgage, the bottom line is that buying a home **on a middle-class salary is still possible** — in some places. Below, check out 15 cities where you can become a homeowner while earning $40,000 a year or less.

The average mortgage loan amount for consumers with Exceptional credit scores is $208,977. People with FICO^{®} Scores of 800 have an **average auto-loan debt of $18,764**.

The usual rule of thumb is that you can afford a mortgage two to 2.5 times your annual income. That's **a $120,000 to $150,000 mortgage at** $60,000.

If you are purchasing a $300,000 home, you'd pay **3.5% of $300,000** or $10,500 as a down payment when you close on your loan. Your loan amount would then be for the remaining cost of the home, which is $289,500. Keep in mind this does not include closing costs and any additional fees included in the process.

For example, if you make $3,000 a month ($36,000 a year), you can afford a mortgage with a monthly payment **no higher than $1,080 ($3,000 x 0.36)**. Your total household expense should not exceed $1,290 a month ($3,000 x 0.43).

The rule of thumb is you can afford a mortgage where your monthly housing costs are **no more than 32% of your gross household income**, and where your total debt load (including housing costs) is no more than 40% of your gross household income. This rule is based on your debt service ratios.

Assuming the best-case scenario — you have no debt, a good credit score, $90,000 to put down and you're able to secure a low 3.12% interest rate — your monthly payment for a $450,000 home would be $1,903. That means your annual salary would need to be **$70,000 before taxes**.