With $2,000 per month to spend on your mortgage payment, you are likely to qualify for a home with a purchase price between $250,000 to $300,000, said Matt Ward, a real estate agent in Nashville. Ward also points out that other financial factors will impact your home purchase budget.
Roughly 51% of homebuyers face monthly mortgage payments of $2,000 or more, up from 18% just two years ago. Not only that, but nearly a quarter of homebuyers have payments above $3,000 — up from 5% in 2021.
The purchase price you can afford with a $2,000 monthly housing ranges from $250,000 to $300,000. But the exact number varies based on your location. We set some basic assumptions to look for options within a $2,000 monthly housing budget.
The average mortgage payment is $2,883 on 30-year fixed mortgage, and $3,759 on a 15-year fixed mortgage. But the median payment is likely a more accurate measure for many: $1,775 in 2022, according to the US Census Bureau.
While the Consumer Financial Protection Bureau (CFPB) reports that banks will qualify mortgage amounts that are up to 43% of a borrower's monthly income, you might not want to take on that much debt. “You want to make sure that your monthly mortgage is no more than 28% of your gross monthly income,” says Reyes.
Key Takeaways. A house poor person is anyone whose housing expenses account for an exorbitant percentage of their monthly budget. Individuals in this situation are short of cash for discretionary items and tend to have trouble meeting other financial obligations, such as vehicle payments.
An individual earning $60,000 a year may buy a home worth ranging from $180,000 to over $300,000. That's because your wage isn't the only factor that affects your house purchase budget. Your credit score, existing debts, mortgage rates, and a variety of other considerations must all be taken into account.
For conventional loan applicants, the median monthly mortgage payment in October 2023 was $2,208, according to MBA data. For FHA loan applicants, the median monthly mortgage payment in October 2023 was $1,955, according to MBA data.
Key average mortgage debt insights
The average mortgage debt balance per household was $241,815 as of Q2 2023, a 4 percent increase from 2022. The average mortgage balance exceeds $1 million in 26 U.S. cities, including 18 cities in California.
Living on $2,000 per month is doable, but you won't be able to live just anywhere. This is important because at the time of writing the average Social Security benefit paid is $1,701 per month.
On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.
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 your annual 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 28/36 rule dictates that you spend no more than 28 percent of your gross monthly income on housing costs and no more than 36 percent on all of your debt combined, including those housing costs.
The average mortgage debt among Americans is $241,815, per Experian's 2023 State of Credit Report. That's up from the average mortgage debt reported by Experian in 2022: $232,545.
By the numbers: The share of mortgage-free U.S. homes has jumped from 34.3% to 39.3% in the past decade, per the census data. Between the lines: There can be a psychological perk to paying off a loan early, but according to some personal finance experts, it could be smarter to invest that money instead.
If you can easily afford it, you should probably put 20% down on a house. You'll avoid paying for private mortgage insurance, and you'll have a lower loan amount and smaller monthly payments to worry about. You could save a lot of money in the long run.
If you're in the market for a mortgage refinance, today's current average 30-year refinance interest rate is 7.18%, falling 3 basis points over the last seven days. Meanwhile, today's average 15-year fixed refinance interest rate is 6.58%, up 3 basis points over the last week.
$1,400 per month qualifies to borrow a loan amount of $204,913; add your $20,000 down payment to this, and you can purchase a home of $224,913. Of course, you'll still need cash for reserves and to cover the loan's closing costs.
“In 2023, it's gonna be tough for first-time buyers, because of higher interest rates, because of tighter supply, and also because of the fact that there might be some uncertainty in the economy,” said Oscar Wei, deputy chief economist at the Realtors group.
$30 an hour is how much a year? If you make $30 an hour, your yearly salary would be $62,400.
The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).
What income is required for a 200k mortgage? To be approved for a $200,000 mortgage with a minimum down payment of 3.5 percent, you will need an approximate income of $62,000 annually.