The short answerThere is no minimum salary to buy a house. Lenders look at your debt-to-income ratio: your total monthly debts, including the new housing payment, divided by your gross monthly income. Limits vary by program and lender.
The ratio that drives approval
Your debt-to-income ratio (DTI) compares monthly obligations to gross monthly income. The new housing payment includes principal, interest, taxes, insurance, mortgage insurance and HOA dues. Other debts include car payments, student loans, minimum credit card payments and support obligations.
Each program has its own DTI limits and may allow higher ratios with strong credit, savings or other compensating factors. Because limits vary, comparing lenders can change your result.
How to estimate your budget
- 1Add up your gross monthly income.
- 2List your current monthly debt payments.
- 3Estimate taxes, insurance and HOA dues for homes you like.
- 4Use the affordability calculator to see a price range.
- 5Get pre-qualified for a number based on your real file.
Monthly debts matter as much as income. Paying off a small car loan or credit card balance can raise your budget more than a raise would.
Income lenders can count
Generally, lenders count income that is stable and documented:
- Salary and hourly wages.
- Overtime, bonus and commission with a history (often two years).
- Self-employment income, from tax returns or, with some programs, bank statements.
- Rental income, subject to program rules.
- Retirement, Social Security, disability and support income that will continue.
Ways to raise your budget
- Pay down or pay off monthly debts.
- Add a co-borrower.
- Choose a program with more flexible DTI guidelines, such as FHA.
- Consider a 2-1 buydown for lower early payments (qualification is still at the full rate).
- Look at homes with lower HOA dues or taxes.