Well that’s good your income is $120k. But income is not the only thing through which we can decide how much mortgage we can qualify for, because we have daily based expenses as well.
After all expenses you have to make sure some things, which are following
1: Is your PITI less than 28%?
PITI is principal: Interest: Taxes: Insurance.
Calculation:
$120,000*28/100=$33,600
2: Is your DTI less than 36%?
DTI contains:
Mortgage, credit card payments, child support and other loan payments
Calculation:
$120,000*36/100=$43,200
3: Down payment of 20%.
Remember; down payment directly affect your total amount of mortgage.
More the down payment will minimize the interest rate on mortgage.
According to survey a person can easily afford mortgage double or even more than the double of his salary. So according to your salary
$120,000*2= $240,000
$120,000*2.5=$300,000
You can easily afford from $240,000 to $300,000 if DTI and PITI is under control.
Wish you all the best.
Hope this will help you, but if you wish to calculate your affordability online, visit
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