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When saving up for a home, it's key to have a reserve of cash savings — or an emergency fund — that isn't used for the down payment or closing costs. It's a good idea to have **at least 3-6 months of living expenses saved up in** this cash reserve.

The day you get the keys, you should ideally still have **at least six months' worth of your income** tucked away for home repairs, property taxes and rainy days. In fact, many mortgage lenders require borrowers to prove they'll have some money left after closing.

Surprisingly, YES! It'**ll be close**, but it's possible with adequate income and good credit. Even though the median home price around the Bay Area is about $1M and often require $200K in downpayment, there are still plenty of good single family homes in the South Bay, and especially San Jose, that are under $600K.

A person who makes $50,000 a year might be able to afford a house worth anywhere from **$180,000 to nearly $300,000**. That's because salary isn't the only variable that determines your home buying budget. You also have to consider your credit score, current debts, mortgage rates, and many other factors.

The most typical cash reserve requirement is **two months**. That means that you must have sufficient reserves to cover your first two months of mortgage payments. So if your principal, interest, taxes, and insurance (PITI) come to $1,500 per month, the reserve requirement will be $3,000.

If you are purchasing a $300,000 home, you'd pay **3.5% of $300,000** or $10,500 as a down payment when you close on your loan. Your loan amount would then be for the remaining cost of the home, which is $289,500. Keep in mind this does not include closing costs and any additional fees included in the process.

By age 25, you should have saved **at least 0.5X your annual expenses**. The more the better. In other words, if you spend $50,000 a year, you should have about $25,000 in savings. If you spend $100,000 a year, you should have at least $50,000 in savings.

The usual rule of thumb is that you can afford a mortgage **two to 2.5 times your annual income**. That's a $120,000 to $150,000 mortgage at $60,000.

A down payment: You should have a down payment equal to 20% of your home's value. This means that to afford a $300,000 house, you'd need **$60,000**. Closing costs: Typically, you'll pay around 3% to 5% of a home's value in closing costs. On a $300,000 home, you'd need $9,000 to $15,000.

Conventional mortgages, like the traditional 30-year fixed rate mortgage, usually require at least a 5% down payment. If you're buying a home for $200,000, in this case, you'll need **$10,000 to secure a home loan**. FHA Mortgage. For a government-backed mortgage like an FHA mortgage, the minimum down payment is 3.5%.

Qualifying for a mortgage when you make $20,000 a year or $30,000 a **year is absolutely possible**. While your income plays a role in a mortgage lender's final decision, it isn't the only financial factor a lender looks at.

The general rule of thumb is that you should save 20% of your salary for retirement, emergencies, and long-term goals. By age 21, assuming you have worked full time earning the median salary for the equivalent of a year, you should have saved **a little more than $6,000**.

How much income is needed for a 200k mortgage? + A $200k mortgage with a 4.5% interest rate over 30 years and a $10k down-payment will require an **annual income of $54,729** to qualify for the loan. You can calculate for even more variations in these parameters with our Mortgage Required Income Calculator.

Example. If the home price is $500,000, a **20% down** payment is equal to $100,000, resulting in a total mortgage amount of $400,000 ($500,000 - $100,000). The average down payment in the US is about 6% of the home value.

By age 30, you should have saved **close to $47,000**, assuming you're earning a relatively average salary. This target number is based on the rule of thumb you should aim to have about one year's salary saved by the time you're entering your fourth decade.

What income is required for a 400k mortgage? To afford a $400,000 house, borrowers need **$55,600 in cash** to put 10 percent down. With a 30-year mortgage, your monthly income should be at least $8200 and your monthly payments on existing debt should not exceed $981. (This is an estimated example.)

The average mortgage loan amount for consumers with Exceptional credit scores is $208,977. People with FICO^{®} Scores of 800 have an **average auto-loan debt of $18,764**.

The rule of thumb is you can afford a mortgage where your monthly housing costs are **no more than 32% of your gross household income**, and where your total debt load (including housing costs) is no more than 40% of your gross household income. This rule is based on your debt service ratios.

I make $90,000 a year. How much house can I afford? You can afford **a $306,000 house**.

The golden rule in determining how much home you can afford is that your **monthly mortgage payment should not exceed 28% of your gross monthly income** (your income before taxes are taken out). For example, if you and your spouse have a combined annual income of $80,000, your mortgage payment should not exceed $1,866.

I make $75,000 a year. How much house can I afford? You can afford **a $255,000 house**.

Can I retire on $500k plus Social Security? **Yes, you can**! The average monthly Social Security Income check-in 2021 is $1,543 per person.

**30k is a good startup**. Be willing to take a risk on an educated guess. Worst that can happen is you loose it but then you'll know what not to do next time. The amount of money you need to save is determined by your unique circumstances.

Many experts agree that most young adults in their 20s should allocate **10% of their income to** savings. One of the worst pitfalls for young adults is to push off saving money until they're older.