How much do you need to earn to get a mortgage approved

What income the bank considers when approving a mortgage

When taking out a mortgage, you must understand that you will have to make large monthly payments for many years. Therefore, your income must be such that you have enough money not only to pay off the debt, but also to pay for your living expenses. 

The lender is also always interested in ensuring that you are able to make regular payments, and therefore, when reviewing an application, it takes the borrower's income into account in one way or another. In particular, when approving a mortgage, the bank pays attention to:

• the borrower's official salary;
• pension payments;
• official payments from entrepreneurial activities. 

In addition, if you have additional sources of income, you can also indicate them by providing official documents confirming cash receipts. For example, when assessing your solvency, the bank will take into account funds you receive from renting out an apartment or commercial premises, income from self-employment, and so on.

Also, when assessing solvency, the bank will certainly take into account whether you own movable or immovable property. In particular, the probability of mortgage approval at a more favorable rate will be higher if you own:

• an apartment or a residential house;
• a vehicle;
• a garage;
• securities and income from them, and so on.

Whether you meet the bank's requirements also matters considerably. They may vary somewhat depending on the chosen lender. Nevertheless, borrowers who meet the following requirements can often get a mortgage:

• citizenship of the Russian Federation;

• being permanently registered in Russia or in the bank's region of operation;

• aged 21 to 75 (as of the mortgage repayment date);

• having at least three months of work experience at their current job;

• having at least one year of total work experience;
• having a regular source of income.

How much you need to earn to get a mortgage

It is very difficult to say exactly how much you need to earn for the bank to approve a mortgage. The minimum income depends on the region where the loan is issued, the property value, the down payment amount, the chosen lender, and so on.

Generally speaking, banks prefer your official income to be at least twice the amount of your monthly payments. Of course, your salary should be higher if you have minor children or disabled dependents, if you also have other loans or credit cards, if you pay child support, and so on. 

It is also advisable to have a certain amount set aside in case of temporary incapacity, job loss, or any other circumstance beyond your control. 

As we said above, it is impossible to calculate exactly how much you need to earn to be approved for a mortgage. However, when deciding on an application, banks most often pay attention to the following factors:

• the borrower's salary level minus regular expenses: payments on other loans, utilities, child support, and so on;
• the requested loan amount relative to salary level;
• the presence of other working people in the family, as well as dependents.

Ideally, after making the monthly mortgage payment, you should have at least the regional subsistence minimum left for each family member.

What income verification documents will be required when applying for a mortgage

While an ordinary consumer loan can be taken out without proof of income, when applying for a mortgage you will need to provide additional documents. These may include:

• a personal income certificate;
• a salary card account statement;
• an extract on the status of the insured person's individual personal account from the Pension Fund of the Russian Federation;
• a tax return;
• receipts confirming tax payment for the last calendar year, and so on.

If you have additional sources of income, you can confirm them with the following documents:

• statements for a savings account or deposit;

• statements showing income from securities;

• a lease agreement for renting out real estate;

• certificates confirming receipt of social benefits;

• a certificate from an unofficial place of work, and so on.

How to get a mortgage with a small salary

Even if your income is too low, you can still get a mortgage. To do this, you can:

• bring in co-borrowers — in this case, the bank will assess your combined income;
• increase the down payment amount;
• provide a guarantor with a higher salary;
• extend the loan term and thereby reduce the monthly payment;
• find a side job and confirm additional income;
• choose less expensive real estate.

You can also take out a mortgage with government support. The terms under such programs are more favorable, so you will have a better chance of receiving a positive decision on your application.

Will a mortgage be approved for a borrower with a gray salary

When making a decision, the bank considers only official salary. Therefore, if the “white” part of your income is small, you may be denied credit. 

However, even in this case, you can get a mortgage. To do this, you need to:

• confirm the “gray” part of your salary;
• provide a large down payment — more than 50% of the apartment's value;
• apply to a bank that offers mortgages without proof of income, for example, Sberbank.

To summarize: when reviewing a mortgage application, the bank considers many factors, including the borrower's salary, additional sources of income, ownership of movable and immovable property, and so on. You can get a loan even with a small or unofficial salary.