How much house can I afford if?
May 21, 2007 · Print This Article
Eileen asked:
How much house can I afford if…
How much house can I afford if…
Okay so let’s say I live in a 600,000 dollar house that I am planning on selling. I also make 200,000 a year. How much house can I afford? Just a general idea.
the family is 2 parents and a kid. 200,000 is what both parents earn together.
bought the house in 1994 for 250k. the other houses on the block that are the exact same size and same look as our house sold for 600k so prob. around there.
this is about my family and my house.
i don’t know much about real estate. i’m only 15.
i’m asking people we were driving down this street of really nice houses. and i was wondering if my dad could afford one of them.
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Josh Dunaway has been a certfied Realtor in the suburban Chicagoland area for over 20 years. Aside from starting his own real estate company, he also owns a mortgage company as well.
You would be better to google a good mortgage calculator.
alot more than the average person
edit: I’ve heard that its good to spend no more than about 30% of your yearly income on housing so for you…30 is like rougly ..40,000…divide by 12…thats ALOT of moolah for house…good for you!
i would not over buy. you need to plan for emergencies and for savings / investments. no more than 30 percent ?
whatever the bank tells you / is to high. always figure lower. they do not care if you can’t meet your mortgage. if you are putting high equity in it, it can be profitable for them if you lose the house.
i would live on one income if you are married. save one income. live on one income. be conservative as the economy is in a turbulent time.
Depends if your in debt already…do u have a family? bills? you can make a million a year and still not be able to afford thing…
your bills, debt, family factor into this question
A lot- provided that you owe less than $600,000 on your current home. Go for 20% down.
So , we are to believe that someone in the $200K range who owns a $600K home ,
Does not have a clue about what you can afford ?
First off , a Real person making $200K knows that debt is a factor and would have indicated that (but you didn’t mention it ) .
Plus , a Real $200K person has already consulted their bank and broker & they know what their pre-qual letter says .
Thus , I am guessing you are poor and have fantasies about marrying someone with a $200K income ?
Is that close ? or what is the real story ?
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Ummm…. one. Since you didn’t actually mention in how many year of work. Even if your house worth 600,000 dollar, is it the price when you bought the house or the final price before you sell it? Well thats all.
If your buyer takes out a loan
and pays you 600,000 for your
house up front, you could use that
money as a down payment on a
house that costs 5-6 million, but
you only make 200,000 a year,
so you might think of buying a house
that costs 1-2 million, with the 600,000
down payment, your payments would
be around 4,000-12,000 a month.
1.)The house is worth $600K but how much do you owe on it?(in other words, how much equity do you have in it to put down on the next house?)
2.) What are you shelling out each month in other debts such as credit cards, cars, boats etc.
A quick way to see how much you can afford is by looking at debt ratios. A typical lender wants to see the following…
no more than 29% of gross income going to Mortgage loan. No more than 35% of income going to all debts combined.
There are loans out there with more relaxed guidelines such as FHA loans etc but those are typically not for $600K + houses.
Go to bankrate.com and use their affordability calculator. It should help.