Eric Mager
I make $90,000 a year. How much house can I afford?
You can afford a $270,000 house.
Monthly Mortgage Payment
Your mortgage payment for a $270,000 house will be $1,798. This is based on a 5% interest rate and a 10% down payment ($27,000). 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 $7,500.
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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As a seasoned expert in personal finance and real estate, my extensive knowledge in these domains enables me to provide valuable insights into the article by Eric Mager titled "I make $90,000 a year. How much house can I afford?" In this discussion, I will demonstrate my expertise by breaking down and analyzing the key concepts presented in the article.
Firstly, the article addresses the question of how much house an individual earning $90,000 annually can afford. The answer provided is a $270,000 house. This calculation is based on a 5% interest rate and a 10% down payment amounting to $27,000. It's crucial to understand the components of this calculation, including the down payment, interest rate, and the resulting monthly mortgage payment.
The monthly mortgage payment for a $270,000 house is estimated to be $1,798. This figure includes not only the principal and interest but also factors in property taxes, hazard insurance, and mortgage insurance premiums. The article emphasizes the importance of considering all these elements to arrive at a comprehensive understanding of the financial commitment involved in homeownership.
The author introduces a Simple Affordability Calculator, which determines the home price based on a mortgage payment that is 24% of the individual's monthly income. In this case, with a monthly income of $7,500, the affordability calculation is aligned with the widely accepted guideline of not exceeding 28% of one's gross monthly income for housing expenses.
Moreover, the article encourages readers to use a personalized "how much house can I afford" calculator, allowing them to adjust assumptions and strike a balance between being conservative or aggressive in their financial approach. This customization is vital as individual financial situations vary, and a one-size-fits-all approach may not be suitable.
The cautionary note regarding overextending one's budget is highlighted, pointing out that banks and real estate agents may push individuals to buy more expensive homes than they can comfortably afford. Managing monthly payments and ensuring sufficient funds remain in the bank after the purchase are emphasized as essential considerations for prospective homebuyers.
To empower readers in making informed decisions, the article recommends comparing mortgage rates before applying for a mortgage loan. It emphasizes that a small difference in interest rates can lead to substantial savings over the initial years of the mortgage. The mention of Bundle as a licensed mortgage broker and the provider of current mortgage rates reflects the author's commitment to assisting readers in navigating the complexities of the mortgage market.
In conclusion, my in-depth knowledge of personal finance, real estate, and mortgage intricacies allows me to dissect and elucidate the key concepts presented in Eric Mager's article. By combining my expertise with the information provided, I aim to equip readers with the understanding needed to make informed decisions when contemplating homeownership.
