Summary: The median price of homes in the Seattle metro area has gone up over the years, but exactly what type of income do you need to be able to afford a home in this area? Click here to find out.
How much income do I need to buy a home in the Seattle, Washington area? What are the minimum income requirements for getting a mortgage loan in Seattle? These are common questions among home buyers, and a new report sheds some light on them.
Income Needed to Buy a Home in the Seattle Area, 2019
According to a study by the mortgage information website HSH.com, home buyers in the Seattle metro area need a salary of $102,516 to afford the principal, interest, taxes and insurance payments on a median-priced home in the area.
Related: How much house can I afford?
To arrive at this figure, they looked at median prices for single-family homes during the first quarter of 2019. So the data are a bit dated. Still, this report does offer some insight into the kind of salary a person might need to afford a home in the Seattle metro area.
Here are the figures they used for this analysis:
- Mortgage rate: 4.49% (note: mortgage rates may have changed since this report)
- Median home price: $497,000
- Monthly payment: $2,392
- Salary needed: $102,516
This calculation is based on a down payment of 20%. For borrowers who put 10% down, the required salary would increase from $102,516 to $119,366, according to the study.
Bear in mind, this is a look at the income needed to buy a home in the Seattle metro area, which varies a lot in terms of home prices. In Seattle, for example, the median home price is $595,000 as of May 2019. But there are more affordable cities in the metro area, where the median home value is roughly half of Seattle’s. For example, the median home price in Tacoma is $370,000. So you have to take these figures with a grain of salt.
A Better Way to Determine Salary Requirements for a Mortgage
There’s a better way to determine how much salary/income you’d need to get a mortgage loan in the Seattle area. Call us!
Sammamish Mortgage has been helping home buyers in the Seattle area, and across the Pacific Northwest, for more than 20 years. We can evaluate your current debt and income situation to see if you’re a good candidate for a mortgage loan, and how much you can borrow.
In the HSH analysis above, they determined how much income was needed to buy a home in the Seattle area using medians and averages. This might offer a ballpark estimate of the salary needed to afford a mortgage. But your situation might be vastly different from the “median” and “average” figures used in this calculation.
That’s why it’s important to speak with a knowledgeable mortgage professional, who can help you evaluate your specific financial situation and needs.
The debt-to-income ratio is an important factor here. As its name suggests, this ratio (percentage) compares the amount of money a person earns each month to the amount spent on recurring debts. The DTI ratio helps lenders ensure that borrowers aren’t taking on too much debt, with the addition of a home loan. It’s a financial safeguard designed to protect borrowers and lenders alike.