If you put 20% down, you need $160,000 in cash plus about $25,000 in closing costs so a total of about $200,000 ($185,000 plus $15,000 reserves) in the bank because lenders don’t want to see you use all of your savings to buy a home. Then you have a loan of $640,000 at, let’s say 3.25% which is readily available as of 6/4/20, so your pinciple and interest payments would be $2,785 a month or $33,420 a year. Your annual property taxes would be around $7,000 in California and insurance $2,000. So the total yearly housing cost would be $42,420 excluding utilities, maintenance, etc. Most lenders would prefer that you don’t spend more than 25% of your inclome on housing so would like you to earn $169,680 a year to qualify with a good credit rating.

Unfortunately, most people don’t have 20% down so more realistically you need a 10% down payment or $80,000 in cash plus $25,000 in closing costs plus $15,000 in reserves so a total of about $120,000 in cash in the bank. Then you have a loan of $720,000 at, let’s say 3.25% which is readily available as of 6/4/20, so your pinciple and interest payments would be $3,133 a month or $37,596. Now you have to add Private Mortgage Insurance because you put less than 20% down which costs around 1% of the loan amount or $7,200 a year. Your annual property taxes would still be around $7,000 in California and insurance $2,000. So the total yearly housing cost would be $53,796 excluding utilities, maintenance, etc. Most lenders would prefer that you don’t spend more than 25% of your inclome on housing so would like you to earn $215,184 a year to qualify with a good credit rating.

I have seen buyers qualify for home loans with less income because there are loan programs with no PMI with less than 20% down payment and more than 25% debt ratio so you have to shop around. This is just a rough example. Contact a local loan broker or lender for more information.