How Much Do I Need to Make to Afford a $600,000 Home?
How Much Do I Need to Make to Afford a $600,000 Home?
Buying a home is a big decision, and one of the most important factors to consider is affordability. You want to make sure that you can comfortably afford your mortgage payments and other associated costs. But just how much do you need to make to afford a $600,000 home? Let's break it down.
First, let's consider the mortgage itself. In general, lenders prefer that your monthly mortgage payment doesn't exceed 46% of your gross monthly income. So, if you're buying a $600,000 home with a 5% down payment ($30,000), with a interest rate of 6.375% (6.778% APR), your mortgage payment, including principle, interest, taxes and insurance, would be an estimated $4,421.
If your monthly mortgage payment shouldn't exceed 46% of your gross monthly income, then you can calculate the maximum monthly payment you can afford by multiplying your gross monthly income by 46%. For example, if your gross monthly income is $10,000, then your maximum monthly mortgage payment would be $4,600.
Next, let's consider property taxes and homeowners insurance. These costs can vary widely depending on where you live, but a good rule of thumb is to budget around 1.2% of the home's value for property taxes and around 0.35% of the home's value for homeowners insurance. For a $600,000 home, this would be $6,000 per year for property taxes and $2,100 per year for homeowners insurance, or $775 per month for both.
Finally, let's consider the down payment. If you're buying a $600,000 home in San Diego with a 5% down payment, you'll need to have $30,000 saved up.
So, in total, you'll need to make at least $10,000, gross income to afford a $600,000 home in San Diego. Keep in mind that these are just rough estimates, and your actual costs may vary depending on your specific circumstances and where you live. It's always a good idea to consult with a mortgage broker to get a more accurate picture of your affordability.
Buying a home is a big financial commitment, and it's important to make sure that you can comfortably afford it. By doing some careful calculations and budgeting, you can determine how much you need to make to afford a $600,000 home and make sure that you're prepared for the costs of homeownership.
If you have a different scenario in mind, such as a higher purchase price, or a higher down payment, I can give you an accurate estimate with just a ten minute phone call. You can call me at 909-581-2564 and I would be happy to go over any questions you may have.
James Taverner
NMLS: 1369773
jamesforhomeloans@gmail.com
909-581-2564
