Eric Mager
I make $65,000 a year. How much house can I afford?
You can afford a $195,000 house.
Monthly Mortgage Payment
Your mortgage payment for a $195,000 house will be $1,299. This is based on a 5% interest rate and a 10% down payment ($19,500). This includes estimated property taxes, hazard insurance, and mortgage insurance premiums.
Simple Affordability Calculator
If you want to change some assumptions, try out our how much house can I afford calculator.
We base your home price on a mortgage payment that is 24% of your monthly income. In your case, your monthly income is $5,416.
You may want to be a little more conservative or a little more aggressive. You’ll be able to change this in our how much house can I afford calculator.
Take the Quiz
Use this fun quiz to find out how much house I can afford. It only takes a few minutes and you’ll be able to review a personalized evaluation at the end.
We’ll make sure you aren’t overextending your budget. You’ll also have a comfortable amount in your bank account after you buy your home.
Don’t Overextend Your Budget
Banks and real estate agents make more money when you buy a more expensive home. Most of the time, banks will pre-approve you for the most that you can possibly afford. Right out of the gate, before you start touring homes, your budget will be stretched to the max.
It’s important to make sure that you are comfortable with your monthly payment and the amount of money you’ll have left in your bank account after you buy your home.
Compare Mortgage Rates
Make sure you compare mortgage rates before you apply for a mortgage loan. Comparing 3 lenders can save you thousands of dollars in the first few years of your mortgage. You can compare mortgage rates on Bundle
You can see current mortgage rates or see how mortgage rates today have trended over last few years on Bundle. We monitor daily mortgage rates, trends, and discount points for 15 year and 30 year mortgage products.
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Sure, let's break down the concepts in the article "I make $65,000 a year. How much house can I afford?" to provide a comprehensive understanding:
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Income and Affordability Calculation: The article discusses how your income affects the affordability of a house. In this case, with a $65,000 yearly income, the article suggests a $195,000 house as affordable. The affordability is determined by considering a mortgage payment that is around 24% of the monthly income, resulting in a $1,299 monthly mortgage payment.
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Factors in Mortgage Calculation: The calculation assumes a 5% interest rate and a 10% down payment ($19,500). Additionally, the estimated costs include property taxes, hazard insurance, and mortgage insurance premiums. These factors contribute to the total monthly mortgage payment.
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Mortgage Rates and Comparison: It emphasizes the importance of comparing mortgage rates among lenders. A difference in rates from various lenders can significantly impact the overall cost of the mortgage, potentially saving thousands of dollars over the loan's duration.
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Avoiding Overextension: The article warns against overextending your budget when purchasing a home. It advises ensuring comfort with the monthly payment and having a sufficient amount in the bank after buying a home. Banks may pre-approve for the maximum amount, but it's crucial to stay within a comfortable budget.
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Utilizing Tools and Resources: It promotes the use of tools like a house affordability calculator and a mortgage rate comparison tool to aid in decision-making. These resources help individuals understand their financial capabilities and make informed choices when buying a home.
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Consideration for Future Trends: It suggests considering historical mortgage rates and trends to make decisions based on potential fluctuations in the mortgage market. Understanding how rates have trended over the years helps in predicting future expenses and planning accordingly.
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Broker Services: The article references a licensed mortgage broker, Bundle, which provides current mortgage rates, trends, and discount points for different mortgage products, offering guidance through the home buying process.
Understanding these concepts can be essential when considering purchasing a house, especially for individuals like the one in the article making $65,000 a year, as it provides a framework for making informed decisions about affordability and financial stability.
