How much income do you need to qualify?

More personal income is required now to qualify for a mortgage since the new b20 guidelines were implemented on jan 1, 2018. Following is an example of how much income you would need today to qualify through many institutional lenders. Please note that these following figures are not carved in stone, but give you a rough idea of how much income you need. 

Assuming:

 A purchase price of 1m 

20 percent down-payment

 Loan amount of $800,000 

30 yr amortization

5.14% qualifying rate.

 Property taxes and heat combine are 600 per month.

 Minimum beacon score of 620.

In this scenario you would require 152,000 of acceptable annual income. You would also be able to have additional monthly expenses of up to 600 per month. So for example you can have a car lease with a 600 a month lease payment. If the monthly expenses exceed this, then the loan amount will get reduced accordingly. Based on this example, you would qualify for 5.26 times your income.  Please note that although the qualifying rate is 5.14% the actual contract rate is much lower. A 5 yr variable conventional rate today is 2.85, but you have to qualify at 5.14. The bank allows 39% of your income to go towards the mortgage payments, property taxes and heat, and will allow an additional 5% of your income to go towards other expenses like car loans, student loans etc. The total percentage of income that the lender allows to go towards all your expenses is 44%. If you don’t verify this amount of income, or you can,  but it’s not the income type  that is accepted by the bank, then there are more options at higher rates like 4-5% which historically are  good rates too.