If you make $70,000 a year, you can afford a house worth $200k-$350k on average. Your income will not only be able to serve the downpayment but will also take care of the extra costs you are expected to incur when moving into the house e.g. transportation costs and costs for new furniture. The total downpayment should not be more than half of your income so that you do not have to struggle when moving in.
How To Know If You Can Afford A House
- The downpayment should not leave your income in a sorry state. The downpayment should not take a large amount of your salary.
- You should be sure of a steady income for the period you are required to pay the monthly installments of the mortgage. Without a reliable income, you will find yourself in trouble when it stops and you still have to pay for the house to completion.
In general, you should ensure that your income allows you to have an easy transition from your old house to the new house. After that, you should make sure that you will make the monthly payments and still have more money left for daily use.
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