How Much of My Monthly Income Will I Need to Pay a Mortgage?

Know your own numbers first to determine how much money you can put toward your mortgage. 


If you are thinking about it, you are just one step closer. Yes, you are deciding to buy a house by your means. Congratulations! And of course, you know that choosing the right mortgage will depend on your monthly income.

A home loan is something you can repay back in 10 up to 30 years. The length of the repayment period means that you have to pick one that makes you feel comfortable every month. It is all about figuring out how much you can afford, and if the amount is reasonable enough to make ends meet in all aspects of life. With that said, having a mortgage does not mean you have to lose financial balance. Want to know how to make it?

Keys to know how much you can afford

We will tackle all the questions surrounding this subject and if there is such thing as a standard percentage of payment, so keep reading!

Know the legal limits

By law, lenders cannot approve mortgages that would take up more than 35% of your monthly income. It means that in most cases that amount is between 28% and 30%. It is established considering your credit score, job history, financial stability, and your income.
To fully understand the housing costs, you need to consider all the considerations that go into it. Mortgage payments, insurance, property taxes, and any other association fee as a whole, should not exceed 28% of your monthly gross income. But if you have a student loan, card bills and monthly debt payments, this cannot 35% of your total income.

How to calculate

To know how much is that in financial terms, you have to multiply your monthly income by 28 (which is the average), then divide that by 100. The answer is, of course, 28% of your monthly income. According to calculations on the median income in the U.S, the result will not exceed $ 1.300 in almost every scenario.

But if your monthly income is above the median, the payment amount can go from $ 1.700 to $ 2.300. These low numbers are the reason why people find so attractive buying a house by carrying a mortgage because it is a good benchmark, or what more enthusiastic people would say: it is a bargain!
Consider other expenses
Yes, you should consider other costs before deciding how much you want to ask from a financial entity. It is also essential to estimate if the monthly payment will exceed that 35%. If that's so, what we recommend you to do is to walk away from that loan amount your first think of, and either you pay off existing debts or borrow less money from your mortgage lender.

In your calculations, you must include childcare (if necessary), transportation costs, grocery shopping, credit scores, and everything that results in a real total income. It seems simple, and it is! Nevertheless, if you still have doubts contact Intercorp Mortgage Solutions, and learn the exact amount of your future mortgage monthly payments once and for all. We know that when all the numbers are out in the open, it is easy to make the final decision.

Source: Intercorp Mortgage Solutions
Follow these simple rules based on your monthly income.

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