How Much House Can You Afford On A 100k Salary?

Ah, the coveted $100,000/yr income.
A six-figure salary is often claimed to be the pinnacle income goal for most.
So, how much how exactly can you afford when making $100,000 per year?
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As with most things in the real estate world, it depends. But, let’s break it down with some examples…
First, we need to start with the monthly payment. The monthly payment is a huge factor in considering how much you can afford, no matter you income level.
This is because your monthly payment and your debt-to-income ratio (DTI) go hand0-in-hand with lenders making sure you have the ability to repay your mortgage.
A good rule of thumb is having a max DTI of 43%. Your max DTI might be higher or lower depending on the lender and type of loan program, but 43% is going to be a solid middle ground for us to consider.
Let’s also put a cap on the housing payment of 28% on the mortgage payment.
So, here’s how we calculate this:
Step 1: Find gross income. Everything is going to be based off of gross income. That is income before taxes. So, in this scenario that is $8,333.
Step 2: Find your max DTI. Our max DTI is $3,583. That means our monthly mortgage payment + monthly minimum debt payments cannot exceed this amount.
Step 3: Figure out monthly debt payments. Find the total off all your monthly minimum debt payments (e.g. auto loans, credit cards, student loans, installment loans, lines of credit, etc.). Let’s say you have a $400/mo auto loan and a $250/mo credit card for a total of $650/mo.
Step 4: Subtract your monthly minimum debt payments from your max DTI. ($3,583 - $650 = $2,933.) This is the max housing payment you can have!
Now that we have our max housing payment, what’s included in that?
A housing payment is your Principal + Interest + Homeowner’s/Flood Insurance + Taxes + Homeowner’s Association Dues.
Now that we know our max housing payment, we need to figure out what kind of down payment we want to put on the house.
Usually, a solid number is 10%. You might qualify to put down less, or you might choose to put down more, but 10% is a solid middle ground. This is where you’ll have to do a bit of guessing to get the math close.
Since you don’t know the max purchase price yet, take an estimate.
The calculator below is a great way to play around with these numbers to figure out how much house you can afford on a $100,000 salary.
smartasset.com...
All in all, figuring out how much you can afford on a specific income is first going to be about your monthly payment.
This is a great way to also see the max housing payment you’re willing to allow in your budget.
The hardest part to figure out is the home purchase price that correlates to that max monthly payment. And this is because so many factors will change (i.e. your down payment, taxes, insurance, homeowner’s association fees, etc).
So, play around with the numbers to figure out your max purchase price with a set income of $100,000, or the income figure that you make.
Hey, my name is Kyle and I'm a Mortgage Advisor serving Tennessee, Florida, and Ohio. My goal is to help you get a crystal-clear home loan that helps you win the house you love. If you're ready to create your home-buying plan, you can reach me through any of the ways below:
➡️ - GET STARTED -
🏠 Connect with a helpful LENDER in your state → www.winthehous...
🏠 Connect with a helpful AGENT in your city → www.winthehous...
- HELPFUL TOOLS -
✅ Max Purchase Price Calculator → www.winthehous...
✅ Lowest Cost Loan Calculator → www.winthehous...
✅ Home Buying Planner →
✅ Today’s Interest Rates → www.winthehous...
✅ Step-By-Step Home Buying Timeline → www.winthehous...
✅ Student Loan Savings Calculator → www.winthehous...
-- Legal --
Kyle Seagraves
NMLS# 1701021
Motto Mortgage Alliance
8900 N. Dixie Dr.
Dayton, OH 45414
Equal Housing Opportunity