How much do you need to make a year to afford a 250k house?
This may be a dumb question to some or not make any sense. I'm just playing around with numbers and would like to know how much income I would have to make yearly before taxes to be able to get approved for a $250,000 home. I assume each bank is different but is there a typical level of income to get approved for that amount? As of right now I'm heading to have 20% of that amount saved before even considering buying a home. I just don't like renting and spending $1300 a month on that.
I should hit my goal of saving 50000 for a down payment in 3 years. Along with $15000 for extra expenses like closing.
So I guess I would be trying to get a loan for 200k
- glennLv 79 years agoBest Answer
If you were trying to get a loan for 200 k and your credit is great and the money market is pretty much like today then you are talking about a 4.75% interest (about). If you are making the property tax and hazard insurance payments out of your own pocket then your monthly payment would be about 1043 a month and the loan company would want you to make about 3.5 times that or about $3650 a month. I think you would be better served if you figured in the property taxes and Hazard insurance and came up with a guess of 1800 a month and required yourself to make about 7000 a month.
Notice that if when you finally make 7000 a month the interest rate may be 7% and the payment without tax and insurance would be 1330 or almost $300 a month more- again without figuring the tax and insurance. I think you might be better served to buy something less before prices and interest rates go up like most people think they will- maybe you can find something pretty good for a little less and get a better rate and price than you will in three years.
- ?Lv 44 years ago
You could afford the $250K house, but not the Ferrari. I know this b/c my hubby made $190K last year. We have a $315K mortgage and our two (normal) cars are paid off. We are quite comfortable but we are not rich by any means. You could get the $250k house, but if you get a car that costs more than $30k or so you will just be living to pay the car payment. It's a bad investment b/c the value will go down, while the home is a good investment b/c the value will go up. Of course, the amount of property taxes you pay gets added to the monthly payment on the house, and that can be pricey. Our taxes are $8800 a year. Plus Uncle Sam will take about a third of your paycheck, leaving you with only about $80k a year. Btw, $120k in Texas or Kansas will get you a lot further than $120k in NY where I live! Your best bet is to live as cheaply as possible (buy a condo) and then use your savings to buy rental properties that will give you positive cash flow, and buy your Ferrari with your investment earnings!
- ?Lv 79 years ago
Constant posting of the same question is spam so be very careful
Mortgage lenders will approve 3 times your annual income
Earn 40k a year you can borrow up to 120k
All lenders follow the same rules of lending
So to borrow 200k you need an annual income of 70k
- Spock (rhp)Lv 79 years ago
85k will probably do it, perhaps a bit less.
although the old guidelines might have been more lenient, lenders are pulling back and don't want to make 'stretchy' loans if they can find a way to say 'no'.Source(s): retired banker
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