“Well, $3,000 is not enough for a down payment on most houses,” says Jill Gonzalez, an analyst with WalletHub. “The lowest percentage of down payment required is 3.5% for an FHA loan.
The less money you finance, the less money banks make off of you. You will likely get more financing options at that deposit level. 3k is almost 20% down from what you've said, and most people are only putting down 10% or less these days.
Conventional loans are most often but not always conforming loans, and they're considered the most common mortgage option. The minimum down payment for a conventional mortgage loan is 3% of the purchase price if you're a first-time home buyer, and it's 5% for repeat buyers.
If you make $3,000 a month ($36,000 a year), your DTI with an FHA loan should be no more than $1,290 ($3,000 x 0.43) — which means you can afford a house with a monthly payment that is no more than $900 ($3,000 x 0.31). FHA loans typically allow for a lower down payment and credit score if certain requirements are met.
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.
Can You Live on 3000 a Month? Whether $3000 a month is good for you depends on the number of family members you have and the quality of living you want to sustain. If you're single and don't have a family to take care of, $3000 is enough to get you through the month comfortably.
What is a typical down payment? As of June 2024, the typical down payment on a house was 18.6% — or $67,500 nationwide. Down payments vary widely by location, though. In San Jose, Calif., for example, the typical down payment is $451,500.
If your down payment is less than 20%, you have to pay a monthly fee for private mortgage insurance (PMI)—a type of insurance that protects your lender if you stop making payments on your loan. PMI can cost anywhere from 0.19–1.86% of your total annual loan amount and is added to your mortgage payment each month.
If your house-to-be appraises for exactly the cost to build, you'll be able to get a loan for 80% of the cost… and you'll need the other 20% in cash. However, with a bank willing to loan 80% of appraised value (NOT just 80% of cost), you can borrow more if the appraised value is higher than the cost to build.
Often, a down payment for a home is expressed as a percentage of the purchase price. As an example, for a $250,000 home, a down payment of 3.5% is $8,750, while 20% is $50,000.
The amount you borrow with your mortgage is called the principal or the mortgage balance. Each month, part of your monthly payment goes toward paying off the principal and part pays interest on the loan. Interest is what the lender charges you for lending you money.
Down payment amounts for a $200,000 house can range from 0% to 20% or more. The required down payment depends on the type of mortgage you choose. Conventional loans typically require 3-20% down for a $200,000 house. Government-backed loans like FHA, VA, and USDA have different down payment requirements.
Mortgage lenders consider factors like a strong credit report, steady income and employment, a savings buffer, an adequate down payment and the ideal loan type.
The Bottom Line. On a $70,000 salary using a 50% DTI, you could potentially afford a house worth between $200,000 to $250,000, depending on your specific financial situation.
FHA loans require as little as 3.5 percent, and VA loans and USDA loans have no down payment requirement at all. Most homeowners don't put 20 percent down. In 2023, the median down payment among homebuyers was 15 percent, according to the National Association of Realtors (NAR).
The two most popular options are FHA loans and VA loans, both of which allow you to finance your home without making a down payment. A USDA loan is one that is guaranteed by the US Department of Agriculture. USDA construction loans and USDA loans are available to support development in rural and suburban regions.
A larger down payment means lower fees and interest over the life of the loan, while the costs of a smaller down payment add up over time: you may pay more in fees and interest. You can often secure better rates with a larger down payment, but you also need to understand how much you can afford.
The average down payment on a house for a first-time buyer is just 8 percent, and some loan programs allow for as little as 3 percent down. A larger down payment can result in a lower interest rate but also limit the funds available for other homebuying expenses.
About 70% of all mortgages are conventional loans, making it the most common type of mortgage. A FICO score of 620 or better is typically required for a conventional loan and, if your score is 760 or higher, you should qualify for the best interest rates.
In most cases, $10,000 is more than enough of a down payment to buy a decent home. But that may not be true in the most expensive housing markets, such as Hawaii and California. Many aspiring home buyers still believe the myth that they need a down payment of 20% of a home's purchase price.
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
While this figure can vary based on factors such as location, family size, and lifestyle preferences, a common range for a good monthly salary is between $6,000 and $8,333 for individuals.
For example, if a person earns $3,000 per month before taxes, they should not pay more than $900 in rent. This rule is based on the idea that housing expenses, including rent and utilities, should not take up more than a third of a person's income.