Securing a mortgage doesn’t hinge on meeting a single, magic income threshold. Instead, lenders look at a variety of factors, including your debt-to-income (DTI) ratio, credit score, and even your employment history, to determine if you’re able to afford your monthly payments. While certain programs like HomeReady and Home Possible do impose maximum income limits, most conventional or government-backed mortgages simply require that your income supports your monthly debts and prospective mortgage payment. So, don’t be deterred if you think your salary isn’t high enough — there’s likely a loan program that fits your financial situation.
When you apply, one of the first things your lender will calculate is your DTI ratio. They’ll add up your monthly debt obligations (like credit card payments, car loans, and student loans), plus your potential mortgage payment, and compare that total to your gross monthly income. While many conventional loans cap DTI at around 36 percent (though some allow up to 50 percent with compensating factors), government programs like FHA, VA, and USDA have slightly different limits — some as high as 43 or 41 percent, respectively. This means your income isn’t the sole deciding factor; it’s how all your financial pieces fit together.
Another common misconception is that only a standard paycheck counts as income. In reality, lenders can consider everything from Social Security and retirement disbursements to rental income and even trust or alimony payments. As long as you can document it and demonstrate steady or predictable cash flow, most lenders will factor it in. That’s why it’s a good idea to gather your pay stubs, tax returns, and bank statements ahead of time — the more thorough your paperwork, the smoother your application process will go.
Finally, it’s worth knowing that certain loan programs are specifically geared toward buyers who earn less than the area’s median income. HomeReady and Home Possible, for instance, allow for a down payment as low as 3 percent but have income thresholds you’ll need to stay under. Other options, like FHA, VA, and USDA loans, have more flexible credit requirements, low or no down payment requirements, and can help you get approved even if your income isn’t sky-high. So, whether you earn an entry-level salary or are closer to retirement, there’s a mortgage out there that can help you on the path to homeownership. The key is understanding how your finances measure up – of course we recommend scheduling a consultation to see what best fits your needs.