Depends on your credit score, how much you'll put down for a down payment, the real estate taxes, amount of homeowner's insurance, and other debt payments (min. credit card payments, car payment, student loan payment, personal loans).
If you have $60k in annual income, and have good credit credit you could comfortably buy a house with a total debt to income ratio of 45%. Fannie Mae will even allow lenders to stretch the DTI to 60% with excellent credit, but I would never do it!
Making some assumptions, like you have good credit, minimal credit card debt, you don't have student loans, and have a smaller car payment, plan on putting 5% down or more, you could probably buy in the $250k range. If your debts are smaller, you might be able to go a little higher, and if your debts are larger, then you might need to go a little lower.
Here's a breakdown of a sample monthly payment based on a purchase price of $250,000 with a 5% down payment, on a 30 yr fixed rate mortgage at 6%.
Principal & interest: $1423
**Based on similar priced homes in Pennsylvania.
Lastly, remember this is a guideline...if you are not comfortable making a payment of $1891/mo, you'll need to put more down, reduce the purchase price, or do both. You have to be able to sleep at night...
Realtor and former loan officer.
· 1 decade ago