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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
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.
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)by Spock (rhp) - 3 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