The math lenders run on $35,000
Lenders start from your gross monthly income, the pay before taxes come out. $35,000 a year is $2,917 a month, or about $16.83 an hour if you work 40 hours a week.
On FHA with an automated approval, your house payment can use up to 46.9% of that, which is $1,368 a month. Your house payment and your other monthly debts together can reach 56.9%, or $1,660. With a $300 car payment, only $1,360 is left for housing under the 56.9% line, so your debts set the price before the 46.9% line does. At this income, debts above about $292 a month lower your price, and paying one down raises it back.
The house payment covers principal and interest at a 5.75% rate on a 30-year fixed loan, property taxes at Florida's statewide estimate of 0.74% of the price a year, $283 a month for homeowners insurance, and FHA mortgage insurance.
Your price by monthly debts
Each row uses a 650 credit score and $5,000 in savings. The first column needs no savings for the down payment.
| Other debts each month | FHA 100% financing, $0 down | FHA with $5,000 saved | Conventional with $5,000 saved |
|---|---|---|---|
| $0 | $159,000 | $142,000 | $160,000 |
| $300 | $158,000 | $142,000 | $121,000 |
| $600 | Same as with $5,000 saved | $115,000 | $82,000 |
The FHA and Conventional columns stop where $5,000 runs out as a down payment: FHA wants 3.5% down and Conventional wants 3%. Closing costs come on top, and on FHA the seller can pay up to 6% of the price toward them. FHA 100% financing takes the down payment ceiling away by covering the 3.5% with down payment assistance.
What raises or lowers the number
- A 600 credit score still reaches $158,000 on FHA, though Conventional doesn't open until 620. At 720 the top price stays near $158,000, and Conventional's mortgage insurance gets cheaper.
- With $20,000 saved instead of $5,000, FHA reaches $172,000 on your own down payment.
- A parent or grandparent with $1,500 a month in Social Security or SSI who co-signs raises the reachable price to about $278,000.
- An eligible veteran can use FHA 100% financing too. VA alone reaches about $93,000 here because of its residual income test, and both need $0 down.
- USDA's tighter 29% and 41% ratios put a $0 down rural home at about $82,000 on this income.
Overtime, a second job, a spouse's pay and non-taxable income can all raise these numbers. Put your own figures into the QualRate calculator, or call AAA Capital Funding at 888-601-8344 and we'll run yours on FHA, VA, USDA and Conventional.