How much house can I afford with a $60k salary?
We get asked the question, “How much house can I afford with a 60k salary” a lot so we decided to create an article on the topic. Unfortunately, this is not an easy question to answer because there are so many variables to consider. Some of the factors that are considered when answering this question are the amount of monthly debts, type of loan, credit score, etc. All of these factors are critical when answering the question. So, one person with significant debt may only qualify for a loan amount of $175,000 and another person with little debt could qualify for up to $300,000. So, make sure you talk with an experienced loan officer to properly calculate the mortgage the approval amount would be..
Can I buy a house if I make 60k a year?
It is certainly feasible to purchase a home with a salary of $60,000 per year. Low–down–payment loans and down payment assistance programs are making homeownership more accessible than ever before for many borrowers. However, everyone’s budget is unique. When it comes to buying a new house, even people with the same yearly earnings might have vastly different pricing ranges. That’s because your budget is influenced by a variety of factors, like your mortgage rate, down payment, loan length, and so on. Here’s how to figure out how much you can spend.
An individual earning $60,000 a year may buy a home worth ranging from $180,000 to over $300,000. That’s because your wage isn’t the only factor that affects your house purchase budget. Your credit score, existing debts, mortgage rates, and a variety of other considerations must all be taken into account.
What kind of house can I afford with a 60k salary?
Once you’re out of debt and have a 3-6 month emergency fund (I recommend 6 when you first purchase property since there will be repairs – believe me! ), it is recommended to have a mortgage payment that’s less than 25% of your monthly income before taxes.
You have very little room for error if you go considerably beyond that amount or if you don’t have an emergency fund in place. A savings account will allow for unexpected expenses that come up when becoming a homeowner.
How much of a home loan can I get on a $60,000 salary?
The general guideline is that a mortgage should be two to 2.5 times your annual salary. A $60,000 salary equates to a mortgage between $120,000 and $150,000. However, this guideline is very conservative and usually exceeded by most homeowners. Lenders like PITI (principal, interest, taxes, and insurance) to be less than 28 percent of your gross monthly income. If your monthly salary is $5,000, you can afford a $1,400 PITI housing payment.
If you desire a property that costs more than your income permits, you may need to make a larger down payment, lowering the amount you’ll have to borrow. In exchange for a proportion of the loan amount, you can pay points to lower your interest rate. One point equals one percent of the loan total, and therefore raises closing expenses while lowering monthly payments. Furthermore, a longer repayment term – say, 30 years instead of 15 – costs more in the long run due to additional interest payments, but it results in lower monthly payments.
Contact the Cain Mortgage Team to find out how we can help you today.
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