With a $200k salary, you can afford a house worth $800k-$1 Million on average. Naturally, any house worth $800k and below will also be affordable on a $200k salary. Opting to buy a house worth more than a million dollars will be possible but you will struggle to pay other life expenses. I will explain to you in detail why a $200k salary is enough for purchasing a house worth $800k-$1 Million and not anything more.
Reasons Why You Should Not Buy A House Worth More Than A Million Dollars With A $200k Salary
- Affordable downpayment: The 10% downpayment of an $800k-$1 Million house is $80k-$100k on average. This is very economical because after paying the downpayment, you will still have half of your income.
- Cost of moving into a new house: You can be able to pay the downpayment of a house worth more than a million dollars but it will leave you with little to cater for other costs. Moving into a house that big will need you to spare some of your income for furnishing and decoration.
- Monthly installments: $200k will be enough to cater for the monthly payments of the house without having to borrow money from somewhere else and still cater to your daily needs.
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