How much salary will you need to earn to afford a 400k house?
- falsi fiableLv 76 years agoFavorite Answer
$133,000 before taxes.
Rule of thumb is that you can afford a house that is about 3 times your gross annual income. Some people qualify for more based on their individual situation (mine is 4x).
Rule of thumb #2: Your mortgage payment (principle, interest, property taxes, and insurance) should not exceed 28% of your gross monthly income. If you have no other debts (no car loans and you don't carry a revolving balance on your credit cards) you may have slightly higher limits. Your total debt load (mortgage plus auto and other minimum debt payments) may not exceed 38% of your gross monthly income.
For best rates, you need 20% down and 740+ FICO. With less than 20% down you will have PMI (Private Mortgage Insurance).
Learn more by reading "Home Buying for Dummies" available from your public library or independent bookseller.
- Anonymous6 years ago
Depends on a lot of things...
For a single person with no dependents and no down payment, you would likely need to earn around 85k/yr to pay off a 400k mortgage in 25 years.
Again, it really depends on your savings, your expenses, how long you want to pay off the debt, the interest rate during your mortgage, and how much you are willing to spend on mortgage payments. Most people don't want to be "house poor", which is a way of saying "I don't want to spend so much of my money on mortgage payments that I can't travel or entertain myself". The rule of thumb for most financial advisors is to spend no more than 32% of your gross income on mortgage payments.