Calculator Documentation
Income Needed Calculator
Find the salary you need to qualify for a specific home
Schema version 1.0.0 · Category: mortgage
Inputs
Target Home
The home you want to buy
| Field | Type | Default | Notes |
|---|---|---|---|
| Home Price | currency | $400,000 | Purchase price of the home you want |
| Down Payment | percentage | 20.00% | Percent of the price you will put down |
| Interest Rate | percentage | 6.50% | Expected mortgage rate |
| Loan Term | select | 30 | Length of the mortgage |
Housing Costs & Debts
Monthly obligations that count toward DTI
| Field | Type | Default | Notes |
|---|---|---|---|
| Annual Property Tax | currency | $6,000 | Annual property tax on the target home |
| Annual Home Insurance | currency | $1,800 | Annual homeowners insurance premium |
| Monthly HOA | currency | $0 | Monthly HOA dues |
| Monthly Debt Payments | currency | $500 | Car loans, student loans, credit card minimums (not the new mortgage) |
Adjustable Parameters
| Parameter | Default | Range | Purpose |
|---|---|---|---|
| Front-End DTI % | 28 | 20 - 40 | Housing costs as a share of gross income (28% conventional guideline) |
| Back-End DTI % | 36 | 28 - 50 | All debts as a share of gross income (36% conventional, up to 43-50% with strong files) |
Calculations
Every figure this calculator produces, in evaluation order. Formulas reference input ids, parameters, and earlier calculations.
downPaymentDown payment
homePrice * downPaymentPercent
loanAmountMortgage amount
homePrice - downPayment
monthlyRateMonthly rate
interestRate / 12
termMonthsTerm in months
loanTerm * 12
principalInterestMonthly P&I
(loanAmount * monthlyRate * pow(1 + monthlyRate, termMonths)) / (pow(1 + monthlyRate, termMonths) - 1)
monthlyPMIPMI when under 20% down (0.55% annually)
if(downPaymentPercent < 0.20, loanAmount * 0.0055 / 12, 0)
monthlyHousingFull monthly housing cost (PITI + HOA + PMI)
principalInterest + annualPropertyTax / 12 + annualHomeInsurance / 12 + monthlyHOA + monthlyPMI
incomeForFrontEndMonthly income required by the front-end ratio
monthlyHousing / (frontEndDTI / 100)
incomeForBackEndMonthly income required by the back-end ratio
(monthlyHousing + monthlyDebts) / (backEndDTI / 100)
requiredMonthlyIncomeThe binding constraint: the higher of the two requirements
max(incomeForFrontEnd, incomeForBackEnd)
requiredAnnualIncomeRequired gross annual income
requiredMonthlyIncome * 12
requiredHourlyHourly equivalent (40 hrs/week)
requiredAnnualIncome / 2080
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