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Jun

2024

What Is the Average Salary by Age in Florida in 2024?

By Melissa Brock | Growing Wealth, Life & Career, Money & Life, relay | Comments Off

If you’re a Florida resident, you may wonder how your salary stacks up against your peers in other states. Or you might wonder about the type of salary you might earn if you move to the Sunshine State.

The U.S. Census Bureau American Community Survey reveals that of all Florida’s workers, those aged 45 to 64 see the highest median household income, at $82,587. The overall median household income in Florida is $69,303.

But what is the average salary in Florida across the board? A typical worker here collects an average annual salary of $48,966 in 2024, or $4,080 per month.

We’ll examine the average salary in Florida in a few different ways: by age, city, and county. We’ll also share examples of the highest-paying jobs in Florida to give you a better understanding of Floridians’ take-home pay.

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Average Salary in Florida by Age in 2024

What is the average salary in Florida by age? The most recent data shows the following annual average income by age among Floridians:

• Under 25 years: $42,617 annually

• 25 to 44 years: $77,487 annually

• 45 to 64 years: $82,587 annually

• 65 years and over: $52,625 annually

As you can see, a gap exists between the salaries of under-25 residents (which can include high school and college-aged students) and those aged 25 to 44. Average salaries peak for workers aged 45 to 64, and decline among those aged 65 years and older.

Floridians’ salaries reflect a national trend in peak earning years. Earnings typically reach their highest point when workers are in their late 40s to late 50s. Women’s peak earning years occur between ages 35 and 54, and men’s peak earning years hit between 45 and 64.

According to data from the Social Security Administration, the average salary in the U.S. is $63,795. And just like in Florida, a few factors contribute to earnings: location, industry, education level, and demand, to name a few.

Average Salary in Florida by City in 2024

It’s important to note that while we’re listing the average salary in Florida by city in the next section (and by county in the section after that), it’s just an average — the number of incomes divided by the number of workers. You may earn above or below the average salaries listed.

Per ZipRecruiter, some average salaries in Florida by city include the following:

• Island Walk: $85,574

• Juno Beach: $78,624

• Ocean Breeze Park: $78,184

• Meadow Oaks: $77,940

• Harbor Bluffs: $77,661

• Port St. Lucie: $60,862

• Boynton Beach: $57,346

• Sunrise: $57,086

• Orlando: $56,808

• Miramar: $56,673

Standards of living — and the salary you need to earn to maintain them — vary by city. For example, a low-end middle-class income in Miami, Fort Lauderdale, and West Palm Beach is $43,000, while a high-end middle-class income is $128,000. No matter where you live in the state, a budget planner app can help you make the most of every dollar you earn.

Average Salary in Florida by County in 2024

The average salary in Florida by county can depend on a wide range of factors, including that area’s need for skilled workers. For example, living in a large metropolitan area with a variety of jobs can draw residents and change the trajectory of a county’s average salary.

The median household income in select counties in different parts of Florida includes:

• Palm Beach County: $70,979

• Collier County: $62,660

• Seminole County: $60,623

• Hamilton County: $56,945

• St. Johns County: $56,425

• Glades County: $52,466

• Citrus County: $46,763

• Hendry County: $48,891

• Madison County: $39,023

• Holmes County: $34,379

From September 2022 to September 2023, employment increased in all of Florida’s 26 counties, according to the Bureau of Labor Statistics. In Miami-Dade County, employment increased particularly in the areas of healthcare and social assistance.

Examples of the Highest-Paying Jobs in Florida

Some of the largest industries in Florida include advanced manufacturing, aerospace and defense, clean energy, information technology, life sciences, and logistics and distribution.

You might be curious about snagging one of the highest-paying jobs in Florida. Here’s a list of the average salary of some of the highest-paying jobs in Florida:

• Finance services director: $211,022

• Staff psychiatrist: $205,364

• Associate medical director: $195,656

• Physician: $193,805

• Clinic physician director: $189,373

• Physician extender: $186,136

• President/chief executive officer: $185,121

• Family practice physician: $184,438

• Pain management physician: $184,207

• Vice president of sales: $184,032

Many types of high-paying jobs require advanced degrees, and as you can see from the list above, some job titles, including that of a physician, require a significant amount of education.

Therefore, you may also want to consider the most in-demand jobs in Florida, which include the following:

• Mental health counselor: $30,112 to $142,147 annually

• Occupational therapist: $40,215 to $136,890 annually

• Management analyst: $41,118 to $104,843 annually

• HR manager: $48,124 to $102,655 annually

• Financial analyst: $48,631 to $97,214 annually

If none of the above fit your credentials or interests, many options abound, including jobs for introverts and for those just starting their careers.

Wherever you are in your professional journey, it’s a good idea to have some short- and long-term financial goals in mind. Tools like a money tracker can keep tabs on where your money goes and also provide valuable insights on your finances.

Recommended: What Is a Good Entry-Level Salary?

The Takeaway

Planning to relocate to the Sunshine State? The average annual salary is $48,966, which is lower than the national average. Still, Florida offers no shortage of opportunities for job seekers, no matter your field or interest area. If you want to lock yourself into a certain salary, research job opportunities in your field, check out the educational requirements, and consider interviewing individuals in the area you’re interested in to learn more about their path and trajectory.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

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FAQ

What is a good average salary in Florida?

In Florida, a good average salary might start at $69,000 for a single individual (without kids). On the other hand, a couple might require up to $94,500 to make ends meet and allow money for fun as well. However, every individual is different, and budgeting techniques can help you carve out money for fun and relaxation no matter your income.

What is the average gross salary in Florida?

The average annual salary is $48,966 in Florida in 2024. This number includes all counties and cities in Florida. However, many factors determine your earning potential, including your location, the cost of living, the job market, industry in an area, and the surrounding competition.

What is the average income per person in Florida?

The Florida average annual salary in 2024 is $48,966. However, this number takes into account all individuals in the Sunshine State, including all ages and all career types. You may earn above or below that amount, depending on your field, location, and other factors.

What is a livable wage in Florida?

A good average salary in Florida of $69,000 breaks down to a monthly salary of $5,750 and a biweekly salary of $2,653.85. It also translates to a weekly salary of $1,326.92, and an hourly wage of $33.17.

Photo credit: iStock/franckreporter

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*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Jun

2024

What to Do if Your Credit Score Is Falling

By Jason Steele | Credit, relay | Comments Off

Your credit score is one of your most valuable assets, and it’s important to take action if you notice that yours is dropping. Many credit card issuers now offer customers free credit monitoring, and there are other ways to check your credit score without paying.

Let’s dive in.

Reasons Why Your Credit Score Can Drop

There are several factors that affect your credit score. Here’s a look at some common scenarios:

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Late or Missing Payments

When it comes to determining your FICO score — a type of credit scoring model used in 90% of lending decisions in the U.S. — your payment history matters. A lot. It’s the largest factor in FICO’s credit scoring formula. Missed or late payments can cause your score to drop by as much as 180 points and could remain on your credit reports for up to seven years. Signing up for autopay is one way to help ensure your bills are paid on time.

Credit Utilization Increased

Credit utilization refers to how much of your credit you’re using, and it can indicate to potential lenders how well you manage your finances. It’s also the second-largest factor in your FICO credit score. The general rule of thumb is not to use more than 30% of the credit available to you. If your credit utilization rate is higher than that, you may see a drop in your credit score.

If you need help keeping tabs on where your money is going, consider using online tools like a money tracker. Besides monitoring spending, it can also provide insights on your finances.

Recent Application for a Mortgage, Loan, or Credit Card

Applications for new credit may only make up 10% of your FICO credit score, but that can still have an impact. That’s because lenders often pull a hard inquiry when you apply for credit, which may cause your score to fall slightly. The good news is, the dip is usually temporary.

A Credit Limit Decreased

If your credit limit decreases, that means you have less available credit. And this can cause your credit utilization rate — or debt-to-credit ratio — to increase. Why does that matter? Your credit utilization rate is one of the factors lenders consider when you apply for credit. In general, lenders consider a debt-to-credit ratio of 30% or below as “excellent.”

You Closed a Credit Card

You may want to think twice before closing a credit card, especially if it’s one you’ve had in good standing for a while. When you close a credit card, your total credit line decreases and your debt-to-credit ratio may increase. This could temporarily lower your credit score.

Inaccurate Information on Your Credit Report

Need another reason to routinely keep a close eye on your credit report? Having inaccurate information — say, defaults on loans you don’t have — could potentially hurt your credit. If you spot a credit report error, be sure to dispute it (more on that below).

Major Event Such as Foreclosure or Bankruptcy

Having your home foreclosed or filing for bankruptcy are major issues that have the potential to damage your credit score for several years. For instance, Chapter 13 bankruptcy stays on your credit report for seven years, while Chapter 7 bankruptcy stays on for 10 years. Meanwhile, a foreclosure remains on your report for seven years.

Check Your Credit Report

If you’ve noticed a significant drop in your credit score, it’s worth looking over your credit report. Typically, your credit report updates every 30 to 45 days and includes key information about your credit history such as:

• Your history of on-time and delinquent payments

• How often you’ve applied for credit

• How many accounts you have open and closed

• Any accounts that are in collections

Every 12 months, you can get a free copy of your credit report from each of the three major credit reporting companies at AnnualCreditReport.com. Be sure to carefully review reports from all three companies, as there may be some differences between what’s reported with Transunion vs. Equifax vs. Experian.

Another option? Signing up for credit score monitoring, which can offer score updates and financial insights.

Dispute Credit Report Information You Believe to Be Incorrect

If you find information on your credit report that’s not accurate, you have the right to dispute it. And the good news is, doing so won’t negatively affect your credit score.

To get the ball rolling on resolving errors, you’ll need to file a formal dispute with the credit reporting company. You can contact them online or by mail or phone. The Consumer Financial Protection Bureau (CFPB) also offers helpful tips on how to file a dispute .

Take Actions to Build Your Credit

Is your credit score not where you want it to be? There are things you can do to help improve it.

One helpful step to take is to pay all of your bills when they’re due, as consistent, on-time payments can significantly raise your credit score over time. Automating your finances is one way to help ensure you don’t miss a due date. It’s also a good idea to focus on catching up past-due accounts so they’re current.

Another step to consider is to limit your credit utilization ratio so your credit balances aren’t too high in relation to your credit limit. You can explore setting up balance alerts that alert you when you’re nearing the recommended 30% credit utilization ratio. You may also want to consider paying your credit card bill more frequently, say, twice a month instead of once a month.

A third strategy is to pay off what you owe. Having a debt repayment plan in place can help, and there are several approaches to consider. Two common ones are the snowball method (where you pay off debts in order from the smallest balance to the largest) and the avalanche method (where you pay off accounts in order from the highest interest rate to the lowest).

What Is a Good or Bad Credit Score?

FICO credit scores run the gamut from 300 to 850, so where does a “good” credit score fall? While there’s no one magic number, most lenders consider scores between 670 and 739 “good.” If your FICO score is between 740 to 799, it’s classified as “very good”; 800 and higher is “exceptional.”

What about scores below 670? If yours falls in the 580 to 669 range, it’s considered “fair.” That means it’s below the average score of consumers, though you may not have issues getting a lender to approve you for a loan. A score of 580 or less is considered “poor,” and could signal to lenders that you’re a risky borrower.

Credit Score Tips

Since paying your bills on time factors heavily into your credit score, you should take steps toward preventing late payments. One good way to do that is to enable auto-pay on your credit cards and other loans.

You can also reduce your credit utilization by trying to minimize the outstanding balances reported to the credit bureaus. For example, if you make payments just before your statement closing date, the lower balance is reported, which reduces your credit utilization.

The Takeaway

Your credit score is invaluable. Lenders use it as they review your applications for credit, as do landlords, prospective employers, and utility providers. So it’s crucial to keep track of your credit score and take action when it falls.

If your score takes a noticeable dip, the first step is to find out why your credit score fell. This may involve carefully checking your credit reports and disputing errors with the credit reporting company. Next, it’s a good idea to take steps to improve your score, which can include paying bills on time, paying off debt, and limiting your credit utilization ratio.

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FAQ

Should I be worried if my credit score dropped?

Changes in a credit score are normal. That said, if yours dropped significantly, and you don’t know why, then you should consider reviewing your credit report and disputing any inaccuracies. However, if the drop is small and expected, then there’s no reason for concern. For example, if you applied for a new credit card, you might see your credit score temporarily drop a bit.

How long does it take to recover from credit score drop?

It all depends on the size of the drop and the cause. If you have higher credit utilization, for instance, your score will likely recover when your utilization ratio drops. But if you have a record of delinquent payments or a default, it can take much longer to recover. And with major events, such as bankruptcy or foreclosure, it may take many years until your credit score fully recovers.

Why is my credit score going down when I pay my bills on time?

While your payment history is the most important factor in your credit score, it’s not the only one. If you are paying your bills on time, your credit score could still drop if your credit utilization is increasing or you have a short credit history.

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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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Jun

2024

How Much Income Is Needed for an $800,000 Mortgage?

By Kim Franke-Folstad | Home Ownership, mortgage, Real Estate | Comments Off

If you earn at least $240,000 to $300,000 a year, you may be able to afford an $800,000 mortgage, assuming you have no significant other debts. But the exact amount you can qualify to borrow — even if you’re in that salary range or higher — will depend on several other variables, including your credit score.

Read on for a look at how much income may be needed for an $800,000 mortgage, how income fits into the overall mortgage equation, and how lenders typically decide how much mortgage a homebuyer can handle.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

What Income Is Needed to Get an $800,000 Mortgage?

You might think the loan amount you’ll receive when you apply for a mortgage will be based mostly on your household income. But income is typically just one of several factors a lender will consider when deciding how much someone can borrow.

The home mortgage loan you can qualify for generally depends on how much the lender believes you can reliably pay back. You can expect the loan company to run your financials through a few different checks and calculations to come up with that number. Here are a few things lenders may look at:

Income

Lenders will ask about your salary to help determine if you can make the monthly payments on the amount you want to borrow. They’ll also want to know how reliable that income is — so you may be asked how long you’ve had your job (or your business if you’re self-employed). If you’re wondering if your income is high enough to afford an $800,000 loan, you may want to use an online home affordability calculator before you apply for a mortgage. Or you might try prequalifying with one or more lenders.

Creditworthiness

Lenders will also check your credit score and credit reports to ensure that you’re financially responsible and have a history of paying your bills on time.

Down Payment Amount

Contrary to what many people believe, a 20% down payment isn’t required to get a home loan. You may be able to put much less down, depending on the type of mortgage you get. Still, a larger down payment can indicate to lenders that you’re serious about your investment, and that could impact your chances of qualifying for the loan you want.

Debt-to-Income (DTI) Ratio

You can also expect lenders to compare your monthly gross income to your existing monthly debts (credit cards, student loans, car payments, etc.) to help assess if you’ll be able to manage all your payments. This is called your debt-to-income ratio, (DTI = monthly debts ÷ gross monthly income.)

What Is a Good Debt-to-Income Ratio?

The Consumer Financial Protection Bureau advises homeowners to maintain a DTI ratio of 36% or less. And in general, that’s the number mortgage lenders are looking for, too. But some lenders may accept a DTI ratio of up to 43% — or even higher if the borrower can meet other criteria on certain types of loans.

What Other Factors Are Mortgage Lenders Looking For?

Here are a few formulas your lender — and you — may use to determine how much house you can afford on your income:

The 28/36 Rule

The 28/36 rule combines two factors that lenders typically look at to determine home affordability: income and debt. The first number sets a limit of 28% of gross income as a homebuyer’s maximum total mortgage payment, including principal, interest, taxes, and insurance. The second number limits the mortgage payment plus any other debts to no more than 36% of gross income.

For example: If your gross annual income is $240,000, that’s $20,000 per month. So with the 28/36 rule, you could aim for a monthly mortgage payment of about $5,000 — as long as your total monthly debt (your mortgage payment plus car payments, credit cards, etc.) isn’t more than $7,200.

The 35/45 Model

Another calculation lenders might look at is the 35/45 method, which recommends spending no more than 35% of your gross income on your mortgage and debt, and no more than 45% of your after-tax income on your mortgage and debt.

Let’s say your gross monthly income is $20,000 and your after-tax income is about $15,000. In this scenario, you might spend $6,750 per month on your debt payments and mortgage combined. This calculation offers a bit more breathing room with your mortgage payment — as long as you aren’t carrying a heavy debt load.

The 25% After-Tax Rule

This formula will give you a more conservative number to work with. With this calculation, you should spend no more than 25% of your after-tax income on your mortgage. So if you earn $280,000 and take home $17,733 a month after taxes, you might plan to spend $4,433 on your mortgage payments.

Keep in mind that these calculations can only give you a rough estimate of how much you can borrow. If you want to be more certain about the overall price tag and monthly payments you can afford, it may help to go through the mortgage preapproval process.

What Determines How Much House You Can Afford?

Here’s something else to consider when determining how much income is needed for an $800,000 mortgage: A house payment isn’t limited to just principal and interest. And the extra costs that may be tacked on every month can add up fast.

Some of the costs covered by a monthly loan payment can include:

Principal

Principal is the original amount borrowed to buy the home, minus the down payment. Each month, a portion of your payment will go toward paying down this amount.

Interest

Interest is the money you pay to the lender each month for giving you the loan. The interest rate you pay can be influenced by personal factors (such as the loan length you choose, your credit score, and your income) as well as general economic and market factors.

Homeowners Insurance

The cost of homeowners insurance also may be rolled into your monthly mortgage payment, with your lender paying the premium when it’s due.

Mortgage Insurance

Depending on the type of loan you get and the amount you put down on your home, you may be required to carry private mortgage insurance (PMI) or some other type of mortgage insurance policy. This insurance is designed to protect the mortgage lender if a borrower can’t make the agreed upon loan payments.

Property Taxes

A portion of your monthly mortgage payment may also go toward the property taxes you’ll need to pay your local government.

Recommended: Home Loan Help Center

$800,000 Mortgage Breakdown Examples

The monthly payment on a $800,000 mortgage can vary based on several factors, including the length of the loan (usually 15, 20, or 30 years) and the interest rate. A mortgage calculator can help you get an idea of what your payments might look like.

Here are some examples of how the payments for a $800,000 mortgage might break down. A mortgage calculator with taxes and insurance can show you how paying taxes and insurance changes the overall cost of your home.

30-Year Loan at 6% Fixed Interest Rate

Total Payment: $5,940
Principal and Interest: $4,796
Other Costs (estimated PMI, homeowners insurance, and property taxes): $1,144

15-Year Loan at 6% Fixed Interest Rate

Total Payment: $7,894
Principal and Interest: $6,751
Other Costs (estimated PMI, homeowners insurance, and property taxes): $1,143

30-Year Loan at 7% Fixed Interest Rate

Total Payment: $6,466
Principal and Interest: $5,322
Other Costs (estimated PMI, homeowners insurance, and property taxes): $1,144

15-Year Loan at 7% Fixed Interest Rate

Total Payment: $8,334
Principal and Interest: $7,191
Other Costs (estimated PMI, homeowners insurance, and property taxes): $1,143

Pros and Cons of an $800,000 Mortgage

According to Redfin, the median home sale price in the U.S. in May 2024 was $433,558. If you can qualify for a mortgage that’s around $800,000, there’s a good chance you’ll be able to find a pretty nice home. (A lot can depend on where you plan to buy, of course.)

The downside of borrowing $800,000 is that your payments could take a sizable slice out of your income every month. If you’re cutting it close and you experience an unexpected expense or temporary job loss, you may have trouble staying on track. You may want to speak with a financial advisor before committing to a loan of this size, to be sure it fits with your budget and your other goals.

How Much Will You Need for a Down Payment?

A down payment is generally between 3% and 20% of a home’s purchase price. The amount you’ll need to put down can vary, though, depending on the type of mortgage loan you get.

Can You Buy a $800,000 Home with No Money Down?

You may be able to get a mortgage with no down payment if you can qualify for a government-backed VA home loan (from the U.S. Department of Veterans Affairs) or a U.S. Department of Agriculture (USDA) loan. These loans are insured by the federal government — which means the government will help pay back the lender if the borrower defaults on the loan.

Borrowers must meet specific requirements to qualify for both VA and USDA no-down-payment loans — and not all lenders offer these programs. But if you think you may be eligible, this could be an option that’s worth looking into.

Can You Buy a $800,000 Home with a Small Down Payment?

If you don’t meet the qualifications for a VA or USDA mortgage program, you might want to check out the requirements for an FHA loan (backed by the Federal Housing Administration) that allows you to make a down payment as low as 3.5%. There may be a limit on how much you can borrow with an FHA loan, depending on where you buy: In 2025, the limit may be as much as $1,209,750 in higher-cost areas. And in Alaska, Hawaii, Guam, and the U.S. Virgin Islands, the 2024 limit is $1,724,725.

Some private lenders will accept as little as 3% down on a conventional mortgage — so don’t overlook that opportunity when you begin loan shopping.

Is an $800,000 Mortgage with No Down Payment a Good Idea?

There’s no question that coming up with a down payment can be an obstacle to homeownership — especially for first-time homebuyers — and skipping that step can be appealing. It may help you get into a home faster or allow you to hold onto your savings for renovations, an emergency fund, or other financial goals.

It’s important to remember, though, that without a down payment it can take longer to build up equity in your home. And though you won’t have to pay for mortgage insurance with a no-down-payment government-backed loan, you can expect to pay an upfront funding fee for a VA loan and an upfront and annual guarantee fee for a USDA mortgage. A mortgage professional can help you weigh the pros and cons of different types of mortgage loans and determine the best move for your circumstances.

What If You Can’t Afford an $800,000 Mortgage Even with No Down Payment?

Here are a few steps to consider if it turns out you can’t afford the payments on an $800,000 mortgage:

Look for a Less Expensive Home to Buy

If you can’t find a home that fits your budget in your favorite neighborhood or city, you may want to widen your search area. Or maybe you could trim down your list of “must-haves” to get a home you still like but can better afford.

Wait Until You’re Earning More

If you expect your salary to increase as you continue moving up the ladder, you may want to put homeownership on hold until you’re earning more.

Wait Until You Can Save More

You may also choose to press pause on your home purchase while you save up more money. Creating a budget and trimming other expenses could help you reach your savings goal. If you can come up with a bigger down payment, you may be able to borrow less and limit your monthly payments to a smaller amount.

Alternatives to Conventional Mortgage Loans

If you can’t qualify for a conventional mortgage loan, you may have some alternatives to consider. Here are a few potential options:

Homebuyer Assistance Programs

As mentioned above, some buyers can qualify for a federal, state, or local first-time homebuyer program that can help lower the down payment, closing costs, and other expenses. There might be limits on how much income you can earn to qualify, the type of home you can buy, or the home’s cost.

Rent-to-Own

Another option might be to enter into an agreement to rent-to-own a home. With this type of arrangement, you start out renting, but the landlord agrees to credit a portion of your monthly payment toward purchasing the home.

If you can afford the payments but don’t have enough for a down payment or can’t qualify for the mortgage you want, this may be a way to start working toward homeownership. But it’s important to understand the downsides of the deal — including that you might lose money if you change your mind about buying the home, or if the landlord has second thoughts about selling.

Owner Financing

With owner financing, the person who’s selling the home serves as the lender for all or part of the amount the buyer borrows to make the purchase. Just as with a rent-to-own home, there are risks to this kind of agreement. But it can make homeownership possible if a traditional loan isn’t available.

Mortgage Tips

No matter how much you plan to borrow, buying a home is a big step. Here are a few things you may want to do to prepare:

Check Your Credit

If you aren’t sure where your credit stands these days, you can request a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and Transunion). Checking your reports can give you an idea of what lenders might see when they evaluate your credit. If there are any errors, you can take steps to get them fixed. And if you see negative (but true) information in your reports, you can work on improving your credit habits. If you use a credit-score monitoring service, you may already know what your credit score is and if it needs a boost. Conventional lenders typically look for a minimum score of 620 to 640.

Work Out Your Housing Budget

Remember, your housing costs won’t be limited to principal and interest. It’s important to determine how much you might pay for insurance, taxes, homeowners association dues, general upkeep, and other expenses before you make the transition from renting to homeownership.

Find the Mortgage and Terms That Best Suit Your Needs

When you start mortgage shopping, you can decide whether you want a:

• fixed vs. variable interest rate

• conventional vs government-backed loan

• shorter vs longer term loan

Remember that if interest rates drop significantly, if your financial situation changes dramatically, or if there are other loan parameters you wish to change down the line, a mortgage refinance may be an option.

Consider Getting Preapproved

Even if you’ve crunched the numbers yourself, going through the mortgage preapproval process with a lender may provide an even better estimate of how much you can afford to spend on a home. And having preapproval may give you an edge over other house hunters in a tight market.

The Takeaway

Getting a mortgage is just one of many steps in the homebuying process, but it’s an important one. Taking the time to do some research and/or ask for help from a professional could keep you from getting locked into a loan — or a home — that isn’t the right fit for you.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How much would an $800,000 mortgage cost over 10 years?

Paying off a $800,000 mortgage over 10 years would cost a total of $1,090,060, assuming you have a 6.5% interest rate.

How much do you need to make to buy a $900,000 house?

If you earn $240,000 or more annually and/or if you can come up with a hefty down payment, you may be able to buy a home valued at $900,000, But you can expect lenders to look at other factors besides your income when deciding how much you can borrow, including your DTI ratio and credit score.

How do people afford $1.5 million homes?

An income of $500,000 or more a year could allow someone to qualify for a mortgage on a home valued at $1.5 million. Having two incomes contributing to the mortgage each month can help. But some people buy $1.5 million homes by putting down an extremely large down payment — for example after the sale of another residence. There are many factors that dictate what you can ultimately afford.

Photo credit: iStock/vladans

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL-Q224-1841811-V1

Jun

2024

How Much Income Is Needed for a $100,000 Mortgage?

By Alene Laney | Family Finances, Home Ownership, mortgage | Comments Off

A $100,000 mortgage comes with a monthly payment around $840. Your lender will look for income in the $28,000 range to make that monthly payment, assuming you don’t have debt already from a car payment or student loan, for example. This number assumes a 6.5% interest rate on a 30-year loan and includes an estimate for the principal amount, interest, taxes, and insurance.

If you’re wondering how we got to this income level, you’ll want to stick around to see exactly how to get the mortgage you need for the home you want. We’ll go through everything you should know about the income required for a $100,000 mortgage.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Income Needed for a $100,000 Mortgage

The income needed for a $100K home mortgage loan depends on your existing debt and down payment. The amount you’ll qualify for goes up and down based on how much you owe and how much you’re willing to put down. (This is where a home affordability calculator comes in handy.)

For example, if you put down $25,000 on a property that costs $125,000, your $100,000 mortgage works out to about $840 monthly, including principal, interest, taxes, and insurance on a 6.5% annual percentage rate (APR). That $840 should be at maximum 36% of your monthly income (assuming you have no debt), which means you need to make at least $2,333 per month, or $28,000 per year, to afford the payment.

Of course, your existing debt affects your $100,000 mortgage: If you’re carrying $400 in additional debt each month, you’ll need more income to qualify for the loan. Here’s a look at the math:

$840 mortgage + $400 additional debt = $1,274 total monthly debt

$1,274 is 36% of $3,539 per month, or $42,468 per year.

In other words, if you have $400 in debt and are looking for a $100,000 mortgage, you’ll need to earn $42,468 per year.

For the most accurate numbers, try using a mortgage calculator with taxes and insurance.

How Much Do You Need to Make to Get a $100K Mortgage?

To recap: For a $100,000 mortgage, you need to make a minimum of $29,138 per year. To get this number, we calculated the percentage of income based on the 28/36 rule of thumb, which states that mortgage payments should be 28% or less of your gross income and no more than 36% of your total monthly debts. Thus, if you have no debt, a lender could approve a monthly payment that is 36% of your income. Some lenders may be even more generous with these ratios.

A $100,000 mortgage at a 7% interest rate on a 30-year term with estimated taxes and insurance works out to be $874. Working backward, we find that $874 is 36% of $2,428 per month, or $29,138 per year.

Keep in mind, that number is without other debt. If you have a car loan or credit card bills, you’ll need to make a higher income.

What Is a Good Debt-to-Income Ratio?

Lenders look for debt levels below 36%, but your chances of qualifying for the mortgage you want improve drastically if you have a minimal amount of debt. Conversely, with a lot of debt, the loan amount you qualify for is much lower.

What Determines How Much House You Can Afford?

Qualifying for a mortgage involves balancing the following factors:

• Income. Your income is one of the most important factors in determining how much house you can afford. Generally, the higher your income, the more house you can afford. But it’s not the only factor.

• Debt. Debt is a huge factor in determining how much house you can afford. Every monthly debt payment you have is calculated in your debt-to-income ratio. When you have too much debt, you’ll struggle to qualify for the mortgage you want.

• Down payment. The higher your down payment, the higher purchase price you can take on. It also changes how much you’ll qualify for because a 20% down payment eliminates mortgage insurance.

A million dollar mortgage seems like a high mark, but if you’re in a state with a high cost of living, it can be relatively common. If you do need to borrow that much, you’ll also likely need a jumbo loan, also called a nonconforming loan, which usually has more stringent requirements.

Whatever amount you need to borrow, take a look at a mortgage calculator or talk to a lender to take your individual situation into account and get the most accurate number.

What Mortgage Lenders Look For

To qualify for a $100,000 mortgage, you’ll want to look like a reliable borrower to the lender. For the best rates on a $100,0000 mortgage, lenders are going to look closely at the following factors:

• Credit history. A credit history full of on-time payments, low credit balances, and only necessary credit inquiries is going to look great to a lender. If your credit has some imperfections, it may still be possible to get a mortgage for a $100,000 home.

• Debt-to-income ratio. If you have too much debt, a lender isn’t going to approve you, no matter how high your credit score is. If you don’t meet the lender’s debt-to-income (DTI) ratio, you may be out of luck. Pay off some debt and try to qualify in the future.

• Income. Income is the biggest factor that affects your odds of approval. Lenders want to see that you make enough to pay back the loan.

• Down payment. A higher down payment represents less risk to the lender, and you may be rewarded with a lower interest rate on your mortgage. Remember that if you qualify for a mortgage but not at the best possible interest rate, you can consider refinancing in the future.

Recommended: Refinance Your Mortgage and Save

$100,000 Mortgage Breakdown Examples

To illustrate the income needed for a $100,000 mortgage, we’ve put together a few scenarios. All assume a 7% APR, but different debt levels will affect how much you qualify for. Keep in mind the taxes and insurance numbers may not reflect your area. The cost of home insurance in Florida, for example, is going to be much higher than in Utah.

When you break down a $100,000 mortgage, it will look similar to this:

Terms

• Home purchase price: $125,000

• Down payment: 20% or $25,000

• Mortgage amount: $100,000

• APR: 7%

Monthly payment: $874

• Principal and interest: $665

• Taxes and insurance: $209

If you don’t have a down payment, it’ll look more like this:

Terms

• Home purchase price: $100,000

• Down payment: 0% or $0

• Mortgage amount: $100,000

• APR: 7%

Monthly payment: $924

• Principal and interest: $665

• Private mortgage insurance: $92

• Taxes and insurance: $164

You’ll notice that you have to pay PMI, an increase of $94. (PMI is required when the down payment is less than 20%.) However, taxes and insurance may be lower because you’re purchasing a less expensive property.

Recommended: Home Loan Help Center

Pros and Cons of a $100,000 Mortgage

When comparing the different types of mortgage loans, there are some benefits and drawbacks to a $100,000 mortgage.

Pros

• Low monthly payment

• May be easier to qualify for than a higher mortgage

• Mortgage insurance premiums are smaller for lower mortgages

• May allow home ownership vs. renting

Cons

• Appreciation may come more slowly

• A lower-priced house may not suit your needs in a few years

• You might be buying a fixer-upper

How Much Will You Need for a Down Payment?

For a $100,000 mortgage, you may be able to qualify for loans with 0% down payment options. The chart illustrates several loan types and the minimum down payment required for each.

Loan type	Minimum down payment	Amount for a $100,000 loan
Conventional	3%	$3,000
Federal Housing Administration (FHA)	3.5%	$3,500
U.S. Department of Veterans Affairs (VA)	0%	$0
U.S. Department of Agriculture (USDA)	0%	$0

If you’re able to put down 20%, you’ll be able to avoid PMI, which is arguably the most hated fee on a mortgage. (If you have it, you’ll want to get rid of it as soon as possible.)

Recommended: Best Affordable Places to Live

Can You Buy a $100K Home With No Money Down?

There are some scenarios where you’ll be able to buy a $100,000 home with no money down. These options have 0% down payment requirements for borrowers who qualify.

0% Down Payment Mortgages

• VA mortgages. VA mortgages are for qualified veterans and service members. A certificate of eligibility (COE) based on service and duty status is required. These loans have no down payment requirement.

• USDA mortgages. USDA mortgages, designed for low- and moderate-income borrowers in rural areasm have no down payment requirement. The interest rate is comparable to a conventional loan, and the mortgage insurance is much lower than the FHA’s. It’s a good deal, so if you live in one of these areas, you’ll want to look more closely at this option.

Can You Buy a $100K Home With a Small Down Payment?

If you can find a $100K house, there are several ways to pull off a small down payment.

• Conventional mortgages. Conventional mortgages have options for down payments as low as 3% of the purchase price. These loans require mortgage insurance, but do allow for it to drop off once the mortgage reaches 20% equity.

• FHA mortgages. FHA mortgages allow for down payment options as low as 3.5% of the purchase price. The mortgage insurance is more costly and doesn’t ever go away, but FHA loans have more flexibility when it comes to credit requirements.

The other options for 0% down payment mortgages — VA loans and USDA loans — also apply here.

Is a $100K Mortgage with No Down Payment a Good Idea?

Absolutely. If you can find a home that requires just a $100K mortgage and can afford the payment, then a no-down-payment mortgage is a good idea. This is especially true if it can help you get into a home sooner.

A $100K mortgage with no down payment does come with a higher monthly payment because of the higher mortgage amount and required mortgage insurance premium.

Can’t Afford a $100K Mortgage With No Down Payment?

If you can’t afford a $100K mortgage with no money down, we have a few tips to help you qualify for a mortgage.

Pay Off Debt

Paying off debt is the secret formula to help you afford a home. When your debt is paid off, your lender doesn’t need to count anything toward your monthly debts. This leaves you with the ability to qualify for a higher mortgage amount.

Look into First-Time Homebuyer Programs

First-time homebuyer programs can help with down payment and closing costs assistance, homebuyer education, and rate buydowns. Most cities and states have some type of program to help first-time homebuyers, so you’ll want to research the program available in your local area.

Care for Your Credit Score

Your credit history is a key piece of the puzzle your lender is putting together, and it takes time to build. These ideas can help.

• Check your credit report. Errors on a credit report are common. You’ll want to take a good look and see if there’s anything you can do to take better care of your credit. Can you pay off an account? Can someone add you as an authorized user on their account to help build your credit history?

• Consider opening a credit account. You need to use credit to build it. If you have a limited credit history, consider opening a credit card or applying for a credit-builder loan. Pay your bill on time each month, and you’ll be on your way to building credit.

• Automate your payments. Use your bank’s bill pay function to automate your payments. You’ll never miss a payment and build your credit history with beautiful, on-time payments.

Start Budgeting

Budgeting sounds boring, but tracking your money is the best way to get better control of it. When you know where your money is going, you can do powerful things with it. That includes saving a little bit every month for a down payment on a house.

Alternatives to Conventional Mortgage Loans

If you’re looking at alternatives to a conventional mortgage, here are some places to look:

• Private lending. Private lenders may be able to help borrowers with special circumstances. You might pay a higher interest rate, but the lender also might have more flexible qualifications.

• Seller financing. It’s possible to enter into an agreement with a seller where you pay them directly instead of the bank. Buyer and seller will agree upon the details privately.

• Rent-to-own. Along the same lines as seller financing is the rent-to-own option, where the seller agrees to finance the property before the buyer is able to purchase it.

Mortgage Tips

Finding a mortgage that suits your needs is important. Here are a few quick tips to get you through the process of choosing a lender and finding the right mortgage for you.

• Shop around. Different lenders have different mortgages, so be sure to shop around to find a mortgage with a rate, term, and conditions that work for you.

• Compare loan estimates. Ask each lender you’re considering for a loan estimate and be sure to submit the same information to each lender (loan amount, loan type, etc.). This will give you a standard form from each lender that can help you compare the fees, interest rates, and terms of each loan offered before you go through the mortgage preapproval process.

• Go with a reputable lender. It’s hard to know if a lender is going to be good from the get-go, but you can read reviews on Trustpilot and the Better Business Bureau to get an idea of what closing a loan with the company is going to be like.

The Takeaway

Affording a $100,000 mortgage requires reliable income, the right debt-to-income ratio, and healthy credit. There are a number of zero down payment mortgages that can aid your mission to buy a home. For most people around the country, the biggest problem is likely going to be finding a $100,000-$125,000 home. When you do find a home at an affordable price, you’ll need a minimum of $29,000 in income to qualify for the mortgage.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How much house can I afford if I make $36,000 a year?

With an income of $36,000 per year, or $3,000 a month, going by the 28/36 rule, the amount of mortgage you’re looking for is between $840 and $1,080. With a 7% interest rate and homeowner’s insurance and taxes, that puts your purchase price at a maximum of $140,000, assuming you have no other debts.

What is the monthly payment on a $100K mortgage?

A monthly payment for a $100K mortgage sits at a little more than $900. This amount includes principal, interest, taxes, insurance, as well as mortgage insurance.

How much home loan can I get if I make $100K?

Without debt, the amount of mortgage you may qualify for if you make $100K is around $325,000. If your monthly income is $8,333, 36% of that amount is $3,000 that can go toward a housing payment. At a 7% interest rate, that works out to be about a $325,000 loan.

Photo credit: iStock/ElenaMorgan

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL-Q224-1839374-V1

Jun

2024

How Much Income Is Needed for a $150,000 Mortgage?

By Kim Franke-Folstad | Family Finances, Home Ownership, mortgage | Comments Off

If you earn around $50,000 to $60,000 a year or more, you may be in a good position to afford a $150,000 mortgage. But the exact amount you’ll be able to borrow — even if you are in that salary range — will likely depend on several other variables as well, including how much debt you have and your credit score.

Read on for a look at how much income may be needed for a $150,000 mortgage, how a borrower’s income fits into the overall mortgage equation, and how lenders typically decide how much mortgage a homebuyer can manage.

What Income Is Needed to Get a $150,000 Mortgage?

Homebuyers tend to think that when they apply for a mortgage, the amount they’re approved for will be based mostly, or only, on their household income. But income is typically just one of several factors a lender will consider when deciding how much someone can borrow.

The home mortgage loan you can qualify for generally depends on how much the lender believes you can reliably pay back. And you can expect the loan company to run your financials through a few different checks and calculations to come up with that number. Here are several things lenders may look at:

Income

Lenders will ask about your salary to help determine if you can make the monthly payments on the amount you want to borrow. They’ll also want to know how reliable that income is — so you may be asked how long you’ve had your job (or your business if you’re self-employed). If you’re wondering if your income is high enough to afford a $150,000 loan, you may want to use a home affordability calculator before you apply for a mortgage.

Creditworthiness

Lenders will also check your credit score and credit reports to ensure that you’re financially responsible and pay your bills on time.

Down Payment Amount

A larger down payment can indicate to lenders that you’re serious about your investment, and it can lower their financial risk. But contrary to what many people believe, a 20% down payment isn’t required to get a home loan. You may be able to put much less down, depending on the type of mortgage you get.

Debt-to-Income (DTI) Ratio

Lenders also may compare your monthly gross income to your existing monthly debts (credit cards, student loans, car payments, etc.) to help assess if you’ll be able to manage all your payments. This is called your debt-to-income (DTI) ratio, and it’s easy to compute: DTI = monthly debts ÷ gross monthly income.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

What Is a Good Debt-to-Income Ratio?

The Consumer Financial Protection Bureau recommends that homeowners work toward maintaining a DTI ratio of 36% or less. And in general, that’s the number mortgage lenders are looking for, too. But some lenders may accept a DTI ratio of up to 43% — or even higher if the borrower can meet other criteria on certain types of loans.

What Other Factors Are Mortgage Lenders Looking At?

Here are a few formulas your lender — and you — may use to determine how much house you can afford on your income.

The 28/36 Rule

The 28/36 rule combines two factors that lenders typically look at to determine home affordability: income and debt. The first number sets a limit of 28% of gross income as a home buyer’s maximum total mortgage payment, including principal, interest, taxes, and insurance. The second number limits the mortgage payment plus any other debts to no more than 36% of gross income.

For example: If your gross annual income is $50,000, that’s $4,167 per month. So with the 28/36 rule, you could aim for a monthly mortgage payment of about $1,167 — as long as your total monthly debt (including car payments, credit cards, etc.) isn’t more than $1,500.

The 35/45 Model

For example: Let’s say your gross monthly income is $4,167 and your after-tax income is about $3,552. In this scenario, you might spend between $1,458 and $1,598 per month on your debt payments and mortgage combined. This calculation offers a bit more breathing room with your mortgage payment — as long as you aren’t carrying a lot of debt.

The 25% After-Tax Rule

This method will give you a more conservative number to work with. With this calculation, your target is to spend no more than 25% of your after-tax income on your mortgage. So, for example, if you make $3,552 a month after taxes, you might plan to spend $888 on your mortgage payments.

Keep in mind that these equations can only give you an estimate of how much you can borrow. When you want to be more certain about the overall price tag and monthly payments you can afford, it helps to go through the mortgage preapproval process.

What Determines How Much House You Can Afford?

Here’s something else to consider when assessing how much income is needed for a $150,000 mortgage: A house payment generally isn’t limited to just principal and interest. And the extra costs that may be tacked on every month can add up fast. Some of the costs covered by a monthly loan payment can include:

Principal

Principal is the original amount borrowed to buy the home, minus the down payment. Each month, a portion of your payment will go toward paying down this amount.

Interest

Homeowners Insurance

The cost of homeowners insurance also may be rolled into your monthly mortgage payment, and your lender will pay the premium when it’s due.

Mortgage Insurance

Depending on the type of loan you have and the amount you put down on your home, you may be required to carry private mortgage insurance (PMI) or some other type of mortgage insurance policy. This insurance is designed to protect the mortgage lender if a borrower can’t make the agreed upon loan payments.

Property Taxes

A portion of your monthly mortgage payment may also go toward the property taxes you’ll need to pay your local government.

Recommended: Home Loan Help Center

$150,000 Mortgage Breakdown Examples

The monthly payment on a $150,000 mortgage can vary based on several factors, including the length of the loan (usually 15, 20, or 30 years) and the interest rate. A mortgage calculator can help you get an idea of what your payments might look like. Here are some examples of how the payments for a $150,000 mortgage might break down.