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How Much Do You Need To Make To Buy A 350k House
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- čas přidán 20. 12. 2023
- Going to a bank and getting a pre-approval letter for 350k, doesn’t mean that you should buy a property for that much money. You have to know that the bank is in the business of making loans and not in the business of making sure you don’t end up financially destroyed.
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1. People Usually Start of with the House which is a terrible idea
- Because what’s the point of looking at things you can’t afford dint he first place
- But just for fun lets look at a property I think is absolutely nice
Property:
- This property is selling for 370k but lets say the owner is willing to take 350k (probably even less honestly )
- I’ll looking to get a 30 year mortgage and put down 10% more on that later ( how much to put down and loan term )
- My total mortgage would be $1,986 with property taxes and insurance included.
If my household income is $6,000 a month, can I afford it? After all its only 33% of my income, right?
The short answer is NO, you can’t afford ( even if the bank is willing to qualify you for it )
2. Here how you should actually do the Math
Down Payment: 10% is fine but I would recommend 20% if possible ( that would be 70k which is a ton of money, but don’t worry if you have only 10%, but you will have to pay PMI insurance few extra thousand a year )
Loan Term: Instead of 30 years to get a lower payment we do 15 years.
- Why? The goal is to pay off the home and buy a home you can afford
- This saves a lot of money in interest and Time.
Last Rule: Limit Cost of Property to 33% of your Net income including all the cost
- Mortgage
- Insurance
- Taxes
- HOA
- PMI
- Maintenance 1% of property value
Let’s wrong those Numbers again:
- 10% down: 35k
- Closing Cost: 2% ( $7,000)
- Maintenance $3,500 at least
Cash: $45,500
- 15 year mortgage + insurance + Taxes = $2,786
- HOA: $0
- PMI: $100 per month as a low estimate
Monthly Cost: 2,886 dollars
Percentage of income: 48.1% that’s 15% higher
3. How Do I afford them
- Well in this scenario you don’t
- But we do have a few options.
Option 1: Look for a Cheaper home you can Afford.
- Example, a home that cost around 250k-260k
- Would be withing your budget.
- This could mean moving states, having a longer commute or just looking at different homes.
Option 2: Save up for a larger Down payment
- Example if you put down a down payment of 40-50%
- You can can afford to buy the home and stick within budget
- Just gotta remember that it is a lot of cash to save up and it could take additional years and by that point home prices have rose
4. Conclusive answer
- To afford home that is that expensive with this math.
- You have to be making a household income over about $8800 almost
- A lot of money
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One thing to note here too is that if you're buying a house on a conventional loan and put down more than 20%, you typically won't have to pay PMI.
That’s very true
Very informative, you got yourself a new subscriber 👍🏼
Thanks brother
Thanks Tommy 😊 needed this
Was hoping to buy to, but I’m very glad I saw your video! Very informative!
Simple and informative 😊
Appreicate these vids😊
Thank you 🙌
You legit made me laugh when you said "so, is this good or bad? it's terrible!" 😂 great video super helpful as I'm hoping to buy a place this year
lol 😂 glad this helped
Thanks!
🙌😎
Thanks Bryson
Got you 😎
Good breakdown and info to consider. Most people, in this generation may never 'own' thier home. Unfortunately.
90k a year to own a 350k house ?
More like 105k after taxes
Also depends on the property taxes! Nobody talks about those pesky property taxes!
Level up the income as much as possible.
@@Lumpia_In_Texas True! Especially if you're in a high property tax state like Texas. I bought a new construction in Keller and watched my property taxes go from $3k to $8k in 7 years!
For us Los Angeleno’s houses are like for billionaires in todays world
35 percent no no no 30 or less but closer to 25 but you need that 20 percent down or more. And low ball the offer as best as possible.
33% because you include all the expenses
@@TommyBryson my wife and I are saving up for a home no more than 350k in about 3 or 4 years we may buy. I think our take home should be in the 7 to 8k range by then. For now we have about 110k saved but we are still visiting and learning about the area we want to potentially live in.
@@dnah02 thats awesome and thats a solid down payment. Also very wise to continue to look at the area. However you may need even less time to be able to buy, with the amount of cash it sounds like you guys have managed to save
@@TommyBryson One of the of the reasons why I want to increase that income is to have more cash to make extra payments to pay off the home as fast as possible.
@@dnah02 Do you guys have kids or plan on having kids soon? thats also a factor to consider. To buy a home and start having kids and just take bit longer to pay off the home is not a bad outcome either. my point is to consider the price ( not just monetary ) you are paying for the things that you want
I wish a livable 350k house was even available in my market. NYC is a different beast 😢
Definitely is, sometimes it makes sense to move and not just because of the finances but also the quality of life
So is Boston.
Broke ass
Bro why you not explaining people about making principal payments
Capital payments help you pay faster; however this video is about affording the house.
Fix the interest rate , this is misleading to people damn .. CZcamsrs could care less about people …. Rates are not 5percent
Brother, rates can be 15% it doesn’t matter. This video is not about interest rates, it’s about buying something that fits your budget. And when you run the numbers it will tell you.
Imagine you watching this in 12 months, rates change. Principles don’t.
Didnt help me at all