How much house can I actually afford on k salary?

Personal Finance

Im pre-approved for k but that seems insane? I make k in Phoenix, have k saved for down payment, no debt. My rent is currently ,600. The mortgage payment on a k house would be like ,800 with taxes and insurance. That feels like house poor territory. What percent of income should actually go to housing? What did you guys actually spend vs what you were approved for?

Christopher Miller

3 Answers

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Good instinct being skeptical of the pre-approval amount. Banks approve you for the max they think you can technically pay, not whats comfortable.

General guidelines:

28% of gross income for housing (mortgage + taxes + insurance)

36% total for all debt payments

Your gross is about ,900/month. 28% = ,212 for housing.

,800 is 35% of your gross which is pushing it, especially in Phoenix where summer electric bills can be brutal.

What I did:
Approved for k, bought at k. My mortgage is about 22% of gross income. I can max my 401k, save for trips, and not stress. No regrets.

My advice: aim for -350k max. Your monthly payment around ,000-2,300. Youll have breathing room for repairs, HOA if applicable, and still have a life. House poor is real and miserable. Ask anyone who bought at the top of their budget.

Jessica Brown

Whatever the bank approves you for, go 20-25% lower. Banks dont care if you have money for fun or emergencies. At k I personally wouldnt go above k-350k to stay comfortable.

Sarah Taylor

Also factor in that homeownership costs way more than just mortgage. Maintenance, repairs, higher utilities, lawn care, etc. My "affordable" house ended up being /month more than mortgage alone.