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What mortgage can I afford?

Every time I calculate how much house I can afford with $60,000+ a year (not including partner's income) I always get the whole "you can't afford this mortgage" even when the houses I'm looking at are under $160,000. The thing I'm wondering is that if someone with above average income can't afford a house on the bottom end of the price scale, how do the majority of people in America even have a roof over their heads these days?

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  • 9 years ago
    Favorite Answer

    I'm not sure what you are using to calculate, but you would get approved for this mortgage as long as your other debt doesn't equal more than around 1,000 per month and the taxes aren't on the high side.

    Sometimes however getting approved for and being able to afford are two different things.

    Feel free to message me and we can do an accurate preapproval for you to see what you can afford.

    Source(s): Mortgage banker for 15 years. Lend in 49 states (we just added 2 more!!). Specialize in government mortgages (FHA, USDA, VA) and explaining the process to first time homebuyers. Real estate paralegal for 10 years prior to working in mortgages.
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  • Anonymous
    9 years ago

    I don't believe we're getting enough information to help you in the best way. With just telling us that you have over $60k/yr income and want to buy a $160k house and everything else being perfect, then I would say your mortgage loan officer is crazy because you CAN afford it.

    HOWEVER, if the issue is that they say you can't afford it because you have additional debt which exceeds the Debt to Income (DTI) ratio guidelines, then that is a different story. For a conventional mortgage your DTI should be around 28%/36%= meaning your monthly payment can't exceed 28% of your income and any additional debt cant exceed 36% (this includes the house payment). Feel free to contact me for more information or a better explanation. :)

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  • Anonymous
    9 years ago

    You are missing something.

    The generic formula is (income minus debt) times 3.

    If you have 60k in income and 10k in debt, you can probably get a $150,000 mortgage with 20% down.

    Keep in mind that in some areas your income isn't enough to afford the average house and in several very large parts of the country the "typical" house is a lot less than $160,000.

    $126,100 in the midwest and $138,200 in the south.

    If you are comparing average home prices in west ($192,100) with the national average income ($45,000/year), that could be the source of your confusion.

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  • Ryan M
    Lv 7
    9 years ago

    You should be able to afford a $160k house on that income quite easily. Your debts might be preventing that from happening, but your INCOME is not.

    Also, preach on about the disparity between housing prices and incomes. At least you do not live here in Los Angeles where the average household income is below $70,000 but the average house is about $450,000!!! And $450k DOES NOT get you into a nice neighborhood either.

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  • 9 years ago

    You state your income, but what are your other expenses? Important to know what your available income is for the mortgage payment.

    Also, what do you have saved up to put as the down payment? Larger down payment means a better rate on the balance of the loan.

    Is $60,000+/year gross or net? I shouldnt have to explain the difference or my reasons for asking.

    What is your credit rating? Better rating means a better interest rate.

    Stop using a calculator online and contact a mortgage broker.

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  • 9 years ago

    Consumer Reports Money stated that you should never make a mortgage for more than 2 times your annual salary.

    Most people here will tell you that 3 times your salary is a good max.

    But.. you need that 20% down payment.

    With 20% you also avoid PMI, which is like throwing thousands away a year

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  • 4 years ago

    what's your activity fee now? have you ever contacted your lender to work out in case you are able to decrease your money by potential of refinancing by them. do you go with for to shop your living house? How previous due are your money? If no greater suitable than a hundred and twenty days previous due, it truly is not too previous due. recommendations: a million. Refinance with a decrease fee &/or an prolonged volume of time. There are 40 year and 50 year very own loan now, which will decrease your month-to-month money. 2. There are activity basically classes. however the activity is activity basically, and not something IS BEING PAID on the thought. i do no longer recomment this, regardless of if it does decrease your money till you get onto your ft returned.. You do provide you the choice to make a a ways better fee and word it on your very own loan concept. it truly is indexed as such on your very own loan fee coupon. desire this facilitates, and sturdy success to you.

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  • 9 years ago

    The real question is: how is your credit? You aren't going to get any sort of loan or mortgage if your credit is not good. If you have a lot of credit cards or loans to where your debt-to-equity ratio is high, then that is not good. So before trying to do any mortgage, check into your credit history and credit score and see what that is like.

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  • Libby
    Lv 4
    9 years ago

    Loans

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