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Monthly Gross Income Calculator
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Monthly Gross Income Calculator

Calculator developed by

Your monthly gross income is important because it impacts many important areas of your life including your ability to access credit and take out loans.  For example, lenders use your gross income in addition to other factors such as your monthly debt expense and credit score to determine what size mortgage you qualify for.  The higher your monthly gross income, the higher the mortgage amount you can afford.  Your gross income is also used when you apply for other types of loans including credit cards as wells as car and personal loans.
Because your monthly gross income plays such an important role in financial decision-making it is important that you can accurately calculate how much money you make.  While determining your income is pretty easy to do if you are paid on a monthly basis it can be more complicated if you are paid on a different schedule such as weekly, bi-weekly (every two weeks), semi-monthly (twice a month) or annually.  You can use our Monthly Gross Income calculator to determine your gross income based on how frequently you are paid and the amount of income you make per pay period.  Select how often you are paid and input how much money you earn per pay period and the calculator shows you your monthly gross income.
It is important to use your gross income, or how much money you make before deductions for taxes, social security and medicare, because this is the figure lenders use when you apply for a mortgage or other type of loan.  Additionally, if you are paid hourly, multiply your hourly wage by the number of hours you work per week. Input this income figure into the calculator and select weekly for how often you are paid and the calculator shows you your monthly gross income.  Knowing your income enables you to manage your personal finances and budget and better understand the financing and credit options available to you. 

Inputs
 
 
Outputs
Your estimated monthly gross income -- your monthly income before any deductions
 
Rate Details*
Loan Program:  
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APR:  
Rate:  
Points  More Info:
Points: Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
 
Total Lender Fees:  
Loan type:  
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Monthly Housing Payments
P & I More Info
Principal & Interest: A periodic payment, usually paid monthly, that includes the interest charges for the period plus an amount applied to the reduction of the principal balance.
Mortgage Insurance More Info
Mortgage Insurance: The monthly cost for a policy that protects the lender in case you’re unable to repay the full amount of the loan. It is typically required for loans that have a loan-to-value ratio between 80% to 100%.
(Estimated)
Property Tax More Info
Property Tax: (Also called "Real Estate Tax.") Property taxes are government assessments on real estate property. With mortgage financing, the local, county or state tax assessment on real estate property is considered part of the monthly housing obligation and typically collected and set aside by the lender ...
(Estimated)
Homeowner Insurance More Info
Homeowner Insurance: or also commonly called hazard insurance, is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.lender ...
(Estimated)
Homeowner Association Fee More Info
Homeowner Association fee: (HOA) fees are funds that are collected from homeowners in a condominium complex to obtain the income needed to pay (typically) for master insurance, exterior and interior (as appropriate) maintenance, landscaping, water, sewer, and garbage costs.
(If Any)
Total Monthly Housing Payments
Lender Fees
Points More Info
Points Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
Origination Fee More Info
Origination Charge: A loan origination charge is a fee charged by the lender for evaluating, processing, and closing the loan.
Credit Report Fee More Info
Credit Report Fee: Fee charged to obtain an applicant’s credit history prepared by one or all of the three major credit bureaus. Used by lender to determine the borrower’s creditworthiness.
Tax Service Fee More Info
Tax Service Fee: A fee charged by the lender to cover the cost of retaining a tax service agency. These agencies monitor the property tax payments on the property and report the results to the lender.
Processing Fee More Info
Processing Fee: A processing fee is a charge by the lender for clerical items associated with the loan. Examples of processing include loan set up, organization of loan conditions for underwriting, and preparing required disclosures for the borrower.
Underwriting Fee More Info
Underwriting Fee: A fee charged by the lender to verify information on the loan application, authenticate the property’s value, and perform a risk analysis on the overall loan package.
Wire Transfer Fee More Info
Wire Transfer Fee: In most cases lenders wire funds to escrow companies to fund a loan. Commercial banks that perform this function will charge the lender so the fee is generally passed on to the borrower.
(If Any)
FHA Upfront Premium More Info
FHA Upfront Premium: A fee paid in cash at the close of escrow or more commonly it is financed into the loan. These premiums are pooled together by the FHA and are used to insure the risk of borrower default on FHA loans. FHA upfront premiums are prorated over a five year period, meaning should the homeowner refinance or sell during the first five years of the loan, they are entitled to a partial refund of the FHA upfront premium paid at loan inception.
(If any)
VA funding Fee (If any)
Flood Fee
Other Fees More Info

Other fees could be either additional Administrative Fees that a lender charges or it could be a Flat Fee to cover all lender charges such as: (Origination Fees, Points, Underwriting and Processing Fees, Credit Reports and Tax Service Fees)

The flat fee does not include prepaid items and third party costs such as appraisal fees, recording fees, prepaid interest, property & transfer taxes, homeowners insurance, borrower’s attorney’s fees, private mortgage insurance premiums (if applicable), survey costs, title insurance and related services.

Total Lender Fees
*Actual rates and other information may vary. Sponsored results shown only include participating lenders. The information you enter on this page will only be shared with lenders you choose to contact, either by calling the phone number or requesting a quote.
Current Mortgage Rates as of December 11, 2018
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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Click here for more information on rates and product details.
While we pride ourselves on the quality and breadth of the FREEandCLEAR mortgage calculators please note that they should be used for informational purposes only. Our calculators rely on assumptions by us and inputs and assumptions provided by you, which may be inaccurate. The outputs from our calculators are estimates only and should not be used as the sole basis for making any financial decisions. Always consult multiple financial professionals when determining the mortgage size and program that is appropriate for you.

1

Gross Income and Mortgage Qualification

Lenders use your gross income, or your income before any subtractions such as taxes, social security and medicare, to determine what size mortgage you qualify for.  Other factors that determine your ability to qualify for a mortgage include your credit score, monthly debt payments, down payment amount and employment history.  Lenders use your monthly gross income to determine how much you can spend on your mortgage payment and total monthly housing expense, which included property tax, homeowners insurance and other applicable fees such as homeowners association dues.  For example, if you earn $60,000 in annual salary, lenders use $5,000 in monthly gross income to determine what size mortgage you can afford ($60,000 / 12 months = $5,000). 

2

Gross Income and Borrower Debt-to-Income Ratio

Lenders take your monthly gross income and debt payments and calculate your debt-to-income ratio.  Your debt-to-income ratio represents the maximum amount of your monthly gross income that you can spend on total monthly housing expense plus monthly debt payments such as auto, student and credit card loans.  Lenders usually use a maximum borrower debt-to-income ratio of 43% to 45% to determine what size mortgage you can afford, although some lenders and mortgage programs apply higher or lower ratios.  In short, lenders only permit you to spend a certain amount of your income on debt expenses including your mortgage.  Borrowers with higher monthly gross income and lower debt payments can afford to spend more on their mortgage payment which enables them to qualify for a larger mortgage.  Borrowers who want to increase the mortgage amount they qualify for should pay down their debt to boost their debt-to-income ratio before they apply for a mortgage. 

3

Net Income and What Size Mortgage You Can Afford

Although lenders use your gross income to determine what size mortgage you qualify for, your net income is also important to think about when you apply for a mortgage.  Your net income is often called take-home pay because it is the money you earn after all deductions -- including 401(k), IRA and health insurance contributions -- are subtracted from your gross income.  Borrowers need to make sure that they are comfortable paying their monthly mortgage payment and total housing expense based on their net income.  Borrowers who live more expensive lifestyles may realize that although they can afford a mortgage based on their gross income, it may be challenging to make the monthly payment based on their net income and spending habits.  Additionally, just because a lender says that you qualify for a certain mortgage amount does not mean that is the right loan amount for you.

4

How to Calculate Different Types of Income

No matter how often you are paid, if you receive a paycheck on a regular schedule it is relatively straightforward to determine your monthly gross income using resources like our calculator above.  If you are not paid on a regular basis and have fluctuations in your paychecks then calculating your income can be tricky.  For example, perhaps you are employed seasonally or make the majority of your income from commissions or bonuses with sporadic payments over the course of the year.  Or you may be self-employed and take uneven payments out of your business.  In these cases lenders typically use your average monthly gross income for the prior two years.  For example, if you earned $40,000 last year and $50,000 this year -- no matter when you received those payments over the course of the years -- the lender adds the income for both years ($40,000 + $50,000 =  $90,000) and divides by 24 months to determine your average monthly gross income, which is $3,750 in this example ($90,000 / 24  months = $3,750 in average monthly income).  Lenders apply this longer, two year approach to account for significant income swings and inconsistent pay cycles.

More FREEandCLEAR Mortgage Resources

Mortgage Guides

Difference Between Gross and Net Income for Mortgage Borrowers

A detailed explanation of the difference between gross and net income when you apply for a mortgage including a helpful example

Programs

Debt-to-Income Ratio for a Mortgage

Understand how lenders apply debt-to-income ratios to your gross income to determine what size mortgage you can afford

Resources

Borrower Mortgage Qualification Requirements

Review our comprehensive overview of borrower qualification requirements before you apply for a mortgage

Ask a Mortgage Expert

Ask a Mortgage Expert

Got mortgage questions? We love answering them. Submit your mortgage questions and receive an informative response within 24 hours

Mortgage Expert Insights

Credit Score Required for a Mortgage

In addition to your gross income, your credit score is another important factor when you apply for a mortgage. Understand how your credit score impacts your ability to qualify for a mortgage as well as your interest rate

Sources

Gross Income Definition: https://www.consumerfinance.gov/practitioner-resources/youth-financial-education/glossary/

About the calculator developer

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

Harry Jensen LinkedInLinkedIn | Email Harry JensenEmail
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