It's not necessarily base on how much you make as to your debt to income ratio. I know people that make a lot and spend a lot. This only limits the amount that they can borrower. Some people don't make a lot of money but they don't spend a lot either. It just depends. I would get prequalified to find out how much you can afford.

Thanks Bridgitte, You caught me being humorous, and I had thought I had disguised it pretty well.
When I do something like that my point is hey the consumer asked a question. I'll give him a straight answer and then say it is only an opinion or an estimate or a guess. What the consumer is not asking for is excuses from us as to why we won't answer his question. If the consumer actually read the buyer qual, he might realize what information a loan officer will need to give him more accurate information.

The questions are kind of oddly put, it is as if he has found two different houses one for $180,000 and one for $60,000. He didn't ask how much of a loan can I qualify for with XXX income. and XXXX debts.

Might be that he is shy about disclosing his income even though a consumer can be somewhat anonymous on the internet.

As a mortgage professional, I have to say that Pam is spot on. There are so many variables. Also consider how to use your mortgage to increase your savings and retirement planning. Most mortgage professionals get caught up in making the deal work and forget to help you plan a few extra steps that could make a significant difference in your life that go beyond your mortgage.

All the best,

Rob Lusk

Al,
Jim gave you the amateur "junior mortgage executive" answer--which was very accurate, detailed and humorous. Don's ballpark percentages gave you an almost similar result. But Pam's answer was actually the most accurate... There are too many variables to consider. You should contact a mortgage professional to "pre-qualify" you. Ask friends, family, or your REALTOR for referrals to find a good one. Best of luck and happy hunting!

Using a rough rule of thumb of 1% per month for costs and 30% of your income dedicated to these costs, you come up with around $24,000 per year needed income.
Don Reser

Buyer Qualification - About $22,000 to 23,000
Prepared: 08/16/2007
Prepared for: Sample buyer
Address: Clay County
Bellevue, TX
Telephone:
The information on this estimated buyer qualification is deemed reliable, but is not guaranteed. The
actual costs with respect to each transaction will vary depending on the circumstances.
Gross Monthly Income $1,850.00
Appropriate Percent for Mortgage 29.00%
Max PITI * $536.50
Appropriate Amt for Total Debt (37.00)% $684.50
Total Monthly Long Term Debt $148.00
Max PITI * $536.50
Maximum Mortgage
Maximum PITI (lower of above) $536.50
Monthly Real Estate Taxes $100.00
Monthly Homeowner Ins $30.00
Monthly PMI $0.00
Monthly HOA $0.00
Estimated Max Principal & Interest $406.50
Annual Interest Rate 7.125 %
Loan Period 30 years
Estimated Maximum Mortgage Amount $60,333.14
* Principal Interest, Taxes, & Insurance
Presented By: Jim Walker 1st American Realty

Al, there are several factors involved in calculating this. The annual income would be based on the borrowers credit score, income to debt ratio, type of financing and down payment.