If you have finally found your dream home and you haven’t pre-qualified for a loan yet in order to see how much you can afford when it comes to buying your home, you can work backwards instead. By plugging in certain information, such as the cost of the home, how much the interest rate on the loan is likely to be, and how much you will pay as a down payment, you can determine how much your income will need to be to qualify for the mortgage loan on the home you love.

For example, if the home you are looking at costs $300,000.00 and you plan to put $30,000.00 down on a 30 year loan with a 5.000% interest rate, your total payment on the principal and interest will be $1,449.42. If your annual property taxes are $3,000.00 and your annual insurance is $1,500.00, that will bring your total monthly payment to $1,936.92. With a monthly payment of this amount, your total gross monthly income will need to be at least $6,456.39 in order to qualify for the loan.