How much house can my income afford? Please answer?
September 12, 2007 · Print This Article
xbuddie90210x asked:
At the following levels of yearly income, how expensive of a house could one afford?
At the following levels of yearly income, how expensive of a house could one afford?
1. $50,000 per year
2.$100,000 per year
3. $200,000 per year
4. $600,000 per year
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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.
$50,000< a 3 bedroom house $300k-$400k with huge mortgage
$100,000 - still $400-600k
$200,000- $600k-$700k < faster payments than 100,000
$600,000 1-2 million dollar grand house in the suburbs. Definitely an above average house.
50,000$ per year
depends on interest rate for loan
depends on how much down payment you have saved up or how much equity you ahve in current house
depends on how many other outstanding loans you may have
total mortgage payment with taxes and insurance included usually should not exceed 30% of gross income
30% of 50K income would be 15K or about 1250 per month
plug that into a calculator online and see what it says for your interest rate and payment time
30% of 100K would be about 2500 per month
at the higher income brackets you might go higher on the % of gross acceptable
General rule of thumb is that the price shouldn’t be higher than 2.5 times your annual income.
So family #1 could afford a $125K house, family #4 could have one that’s well over a million.