NEW YORK (TheStreet) -- With the spring home-buying season in full swing, prospective buyers are sure to ask: "How much to I have to earn to buy a decent home?"
There are two ways to look at that: simple and hard. The simple answer is mainly math, covering such things as mortgage interest rate, size of down payment and cost of the home. The harder look adds issues including how secure your job is, how many kids you will put through college and how you are doing on retirement saving.
"Overall, buying a home remained very favorable during the first quarter of 2014," says HSH.com, the mortgage and housing data firm. "In some markets, home prices have declined in recent months, though that saving is offset by a slight rise in mortgage rates."
"It was nearly a 50-50 split between the areas which saw the required salary increase or decrease from the fourth quarter of 2013 to the first quarter of 2014."Maximum Mortgage Calculator. But, as mentioned above, borrowing the maximum is not necessarily a good idea. The HSH list of 27 cities has 16 in which the median home price dropped during the first quarter of this year. That doesn't mean the value of every home dropped, but it does show that the housing rebound has slowed from last year. If buying a home involves some risk of loss, it may be unwise to borrow every cent you can get. Money put into a home is, of course, not available for other things, such as saving for college or retirement. So it makes sense to minimize the monthly mortgage payment in order to fund those other needs. Finally, a borrower should plan for the worst. If you have a two-income household, would you be able to make payments if one of you got a pink slip? Anyone with an undependable income should stop short of getting that maximum mortgage.