what type of house can we afford? we make 40000 a year?

My husband and I want to buy a house, we make 40000 a year, what will be the maximum price(moreless) of the house we can afford? we have good credit and we only have a truck payment of 500 and insurance.

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    Typically I would say you can afford an 80,000 house. It all depends on how much you have budgeted though for a monthly payment. I have answered this question recently in my blog. It details how to go about buying a home and what to expect for your affordability. To see this answer go here. http://blog.financialinterstate.com/how-to-go-abou... Hope this helps let me know if I can be of more help.

  • 1 decade ago

    My bank has a great calculator for estimating the PI payment along with taxes and insurance combined. But when you are looking to buy it is a good idea to take a good look into both your liabilities (such as the car payment and insurance) and also into your current spending habits.

    A good book to take a look at (I borrowed a copy from the local Library) is Home buying for Dummies there is an entire chapter devoted to determining how much home you can truly afford. Versus the amount you may be approved for there are many things the bank does not take into consideration.

    Here are a few of them for an Idea (but I reccomend reading some basic home buying books because im sure I will forget something)

    Basic Home expenses:

    1) Principle and Interest payment

    2) PMI if you do not have a 20% downpayment (unless you qualify for a VA loan.)

    3) Home insurance

    4) Liability Insurance

    5) Home Maintence and Repairs

    6) HOA dues

    7) Utilities -water sewer waste cable phone electric

    8) Property Taxes to include any other special assements

    Other Monthly Liabilities to consider:

    1) Food

    2) Transportation costs - maintenance, Fuel, state registration fees, Tolls or parking fees (if applicable)

    3) Debt Repayment - Auto Loan, Student Loans, credit card debt or anything else that requires a monthly payment

    4) Health care - Insurance, dental and vision,

    5) Insurance - auto, life, disability

    6) Clothing, shoes, haircuts, dry cleaning, makeup, other

    7) Child care, toys, clothing, school...

    8) Retirement savings

    After looking through your monthly expenses determine what amount is left over monthly. That should give you an idea of the amount you can really afford for a home. The monthly amount you can afford should take all the basic home ownership expenses into account.

    My husband and I have been looking into buying a home and while the bank could approve us for nearly 200k we found we were more comfortable with closer to 100k once we reviewed our spending habits and monthly obligations.

    Just remember the bank is never telling you what you can AFFORD when they approve or qualify someone they are only letting you know the maximum amount that they will let you borrow.

    Also take into consideration closing costs when buying some mortgage brokers will offer a loan with little or no closing costs but they may end up costing an arm and a leg later on in the form of higher interest rates and fees.

    Source(s): Personal Home Buying experience Along with : Home Buying for Dummies Suze Ormans 2009 action plan Buying a House on a shoestring Investing in Fixer Uppers
  • 1 decade ago

    Its not a matter of what kind oh house you can get. It however is a matter of what you can afford a month in a mortgage payment. Plus having things like a truck payment means you have an outstanding debt. You will have to come up with a large down payment. To be honest with you.....if you two are only making 40 thousand together in total income and your paying out 6 thousand a year in truck payments. Then your only really making about 34 thousand a year.

    So your looking at something around the 50 thousand to 85 thousand range when buying a new home. Sorry no fancy subdivision.

    This sounds discouraging, my advice would be to go to a first time buyers home class. These classes are usually free and you get alot of advice and learn alot of things you need to know about owning a home.

    Source(s): Recent home buyer.
  • Anonymous
    1 decade ago

    I have been on real estate for over 16 years and....I cant say it any better that Shannon... She outlined everything you need to know.

    I don't think looking at a home in the 120k range as suggested above, is a good idea. You would be looking at a pay approx $770.00 for a house payment.. (with 20% down, that's $20,000) Between the car and the house that's $1270.00 a month... not including insurance, elec, gas, water and overall upkeep of a home...

    Start by getting pre-approved thru a lender.. but again, like Shannon (above) says... You need to go thru EVERYTHING you spend you money on, before you decide what you can afford.

    Good Luck!

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  • Audy
    Lv 6
    3 years ago

    For Credit and finance solutions I visit this site where you can find all the solutions. http://personalcreditsolutions.info/index.html?src...

    RE :What type of house can we afford? we make 40000 a year?

    My husband and I want to buy a house, we make 40000 a year, what will be the maximum price(moreless) of the house we can afford? we have good credit and we only have a truck payment of 500 and insurance.

    1 following 7 answers

    Source(s): For Credit and finance solutions I visit this site where you can find all the solutions. http://personalcreditsolutions.info/index.html?src...
  • 1 decade ago

    Your max would be about $120k no more then 3x your annual income. Your payments WITH taxes and home owners insurance should be no more then 1/3 of your monthly bring home pay (1/3 is to be on the safe side).

    So figure you take home pay after all taxes and health insurance and whatnot, minus the 500, and there's your figure.

    The less the better since you will have other bills like water, sewer, electric, gas, probably trash and all your monthly amenities. (phone and internet)

  • Kokita
    Lv 4
    4 years ago

    Depends on what part of the country and what other bills you have. You'll have the regular utilities to go with the house for starters. Then you have car payments, car insurance, credit cards..... etc. Here in San Antonio, cost of living is low. That type of pay can get you an upper $100k easy enough, that is getting to our 'high end' unless you are looking at the Dominion which is where our Spurs basketball players live. Those are mid $200k and on up.

  • 1 decade ago

    Welly mom and dad together make 30,000 a yr and we live in a nice 92,000 dollar house in the suburbs. Alittle over a hundred should be your price range.

  • 1 decade ago

    A mobile home.

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