If we make roughly $35,000 a year, how much can we afford on a home loan?
Three years ago my husband purchased our current home with only his income for $50k and he was making only $10 an hour. This is completely affordable to us. Now though, we are looking at buying a bigger home as our family is growing. The home we are looking at is listed in the $80k range and my husband is making now $13 an hour and we could list my income as well, which is around $10 an hour. We do have some debt but 2 of our loans will be paid off when we get our tax money next year. Does this newer home seem affordable? Personally I think we'd have no issue paying for a little bigger mortgage because I know we will have those 2 loans paid off in a few months and listing my income as well would only help our chances of getting approved for more money, am I right? Let me know what you think. Thanks for all opinions.
- Ring0RosieLv 77 years agoFavorite Answer
If your combined income is $35k a year, you should be looking at house in the $70k range.
Of course, we can't give you an exact number because we don't know your credit score, debts, your down payment amount, equity in your current home or other important factors. I suggest using a calculator online and also by speaking to a financial advisor that you trust.
EDIT: I have to second what the person above said about overtime. I highly suggest that you do NOT factor in wages earned from overtime into your calculations because there is no gaurantee you will be able to have access to overtime hours.
- Go with the flowLv 77 years ago
Google: how much home can we afford calculator
That way you can input the income and the debt.
For a mortgage, income must be for 2 solid years with tax returns.
You also will need a down payment.
Get pre-approved for a mortgage before you ever look for a home.
These days realtors will not give you the time of day without this.
- 7 years ago
I don't think you can afford the new house. Instead, I would try to increase the living space in your existing house. Maybe you can transform the basement into a room or build a new room attached to the house. This is probably much cheaper than paying an extra $30k for a new house, plus interest on the loan, plus the loss you will take on your current house (I'm assuming you won't be able to sell it for $50K), plus all the fees. That could easily add up to $10k + the extra $30k for the new house = $40 k. I would guess that attaching a new room to your house would be under $10k
- Anonymous7 years ago
$50K a year at $10 an hour is 5000 hours. Even with overtime, that's averaging 2 shifts a day. That is not sustainable.
If your income is truly $35K a year, the loan should be no more than twice your income. Add to that your downpayment (5-10%) and you'll know what you can afford.
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- Casey YLv 77 years ago
What are the loans??? Those will impact your credit and a mortgage broker will look at your credit history. If those are payday loans, you might not qualify.
You could probably afford approximately $1,000 per month (based on around 1/3rd of your annual household income).
- 7 years ago
Your total debt-to-income ratio should be no more than 36 percent. Before buying, however, you should also factor in other savings needs, including retirement and college. Just use one of the online financial calculators to figure this out. CNN has a good one: http://cgi.money.cnn.com/tools/houseafford/houseaf...
- 7 years ago
You probably don't make quite enough to qualify for a loan - or if you can qualify, it would be a burden to have it.Source(s): http://www.moving.com/tools/mortgage-affordability... http://www.fha.com/calculator_afford.cfm
- 3 years ago
that is not completely correct