About This Video
When calculating how much home you can afford, looking at the purchase price alone isn't enough. You have to factor in the full monthly payment, including your down payment, principal, interest, property taxes, and any required mortgage insurance.
Let’s break down the real numbers using an FHA Loan example:
📍 The Upfront Cost:
- Purchase Price: $500,000
- 3.5% Down Payment: $17,500
- Base Loan + Upfront MIP (1.75%): ~$491,000 Total Loan Amount
📍 Estimated Monthly Payment ($3,892/month total):
- Principal & Interest (at 6.625% rate / 7.38% APR): $3,144
- Property Taxes (estimated): $375
- Homeowners Insurance (estimated): $150
- FHA Monthly Mortgage Insurance (MIP): $224
📍 Required Income:
Assuming a standard 45% Debt-to-Income (DTI) ratio and zero other monthly debt (no car payment, student loans, or credit cards):
👉 You would need approximately $8,650/month before taxes (~$104,000/year in household income).
Keep in mind: If you have existing monthly debt payments, the required income will increase accordingly.
📲 Curious what your income qualifies you for? Reach out to Lock It Mortgage today, and we'll run the numbers for your specific situation before you start house hunting!
Disclaimer: Figures, rates, and APRs used in this video example (6.625% rate / 7.38% APR) are for illustrative and educational purposes only, quoted as of September 24, 2026. Interest rates, payments, property taxes, insurance, and underwriting guidelines vary by scenario and are subject to change without notice. All loans are subject to borrower qualification, property eligibility, and underwriting approval.
