How Much Income Do I Need to Buy a House or Condo in Washington?

Published:
August 23, 2018
Last updated:
August 13, 2021
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Summary: Do you know how much you need to earn every year to purchase a home or condo in the state of Washington? This article will explain your income requirements.

“How much income do I need to buy a house or condo in Washington State?” This is one of the most frequently asked questions among home buyers, particularly those who are new to the process.

Assuming you’re using a mortgage loan to finance your purchase, the amount of income needed might vary based on the requirements of the loan program. Having a combined debt-to-income ratio no higher than 50% is a good place to start. But that rules isn’t always set in stone.

Income Requirements When Buying a Home in Washington

If you’re going to take on a mortgage loan when buying a home in Washington, you’ll need some form of income so you can make your monthly payments.

That much is obvious. But how much income do you need to qualify for a loan? This can vary based on several factors, including the type of mortgage loan you plan to use.

Here are some general guidelines to give you a frame of reference:

  • When you apply for a mortgage loan to buy a home in Washington, your loan officer will request certain documents relating to your income.
  • These documents are used to determine how much money you earn each month. They’re also used to determine your debt-to-income ratio, or DTI.
  • The DTI is a comparison between the amount of money you earn, and the amount you spend each month to cover your various debts. It’s an important tool used by banks and lenders of all types.
  • Most mortgage programs today have a total or back-end DTI limit somewhere around 50%. That means if your combined debts (including the mortgage payment) use up more than 50% of your income, you might have a harder time qualifying for financing.
  • Just know that the 50% threshold is not always set in stone. In some cases, exceptions might be made for borrowers with other compensating factors.
  • The best way to find out where you stand is to get pre-approved for a loan. That way, you’ll know if you’re qualified to take on a mortgage based on your current income. Pre-approval also helps you narrow your house hunting to those properties you can afford.

Note: This is the starting point for determining how much income you would need to buy a home in Washington State. There are some other factors that have been left out for the sake of simplicity. Please contact a member of our staff if you have questions.

Related: Overview of mortgage requirements

View Washington State Mortgage Rates

A Basic Housing Budget Is a Good Place to Start

How much can you comfortably afford to spend each month toward your housing costs? This is another important questions to consider, and it relates to the income question we just addressed.

Before you start looking for a home to buy in Washington, it’s a good idea to have a basic budget on paper. It doesn’t have to be anything complex — just a basic assessment of your current income versus expenditures.

The goal here is to determine how much money you could afford to put toward a monthly mortgage payment, after all of your other expenses have been covered. “Other” refers to such things as your car payment, credit card bills, groceries, gas, etc. If you add those items up and subtract them from your net monthly income (or take-home pay), you’ll have some idea as to what you can afford.

Just remember to account for quality-of-life items like entertainment, vacation, etc. It’s also wise to keep some money in the bank as an emergency fund. Financial advisors often recommend putting aside three to six months worth of expenses, to serve as an emergency fund.

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Ready to Buy a Home or Condo in WA?

If you’ve determined that you have the income needed to buy a home or condo in WA, Sammamish Mortgage can help you obtain the mortgage you need. We are a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as Oregon, Idaho, and Colorado. We have been offering a variety of mortgage programs to borrowers since 1992. Please contact us if you have mortgage-related questions.

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