Thinking about buying a home but not sure how much you can afford on a $100K/year salary? Let’s break it down 👇:
1️⃣ Calculate your monthly income: $100,000/12 = $8,333
2️⃣ Budget for housing: $8,333 x .45 = $3,750
3️⃣ Subtract your monthly debts (like student loans & car payments): $3,750 – $800 = $2,950
4️⃣ Use a mortgage calculator to determine Purchase Price using variables:
- Down Payment: $40,000
- Interest Rate: 7.125%
- Property Taxes: 1.6%
- Estimated Purchase Price: $370,000
With a down payment of $40,000 and considering current rates and taxes, you could be looking at homes around the $370,000 mark. But remember, it’s wise to spend no more than 28% of your income on your mortgage, which would adjust your target to about $325K.
Always consult with a mortgage expert.
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