HOMEBUYERS - HOW MUCH HOUSE CAN I AFFORD? | JULIAN PARK TOP REAL ESTATE AGENT | GET REAL VALLEY
Congratulations. You're making five grand a month, maybe even six grand a month. Well, how much house can you afford? Now I get this asked all the time. Well, the truth is, is that in LA it's pretty expensive. If you're making five grand a month, you're going to be still at the bottom of the home purchasing spectrum. Here's how it breaks down. If you make $65,000 a year, then you can probably afford around $350,000 which is a starter condo. If you make around $80,000 a year, you can afford something around $450,000 a, which is going to be a starter, single family residence, and if you make $100,000 a year, then you can afford something on $600,000 which is a pretty decent single family residence. How do you get these numbers while you take your pre tax income? If you make $5,000 a month and you take half of that, half of that is $2,500 those $2,500 that's going to be your mortgage payment, which includes your, your principal, your interest, your taxes, and your home insurance.
And in some cases that does include HOA. It does not include utilities. So that's exactly just how you know, if you make $10,000 a month, then your monthly housing costs can be $5,000 a month. This is just generally a rule of thumb. If you have liabilities like car payments, student loans, or max out credit cards, that definitely affects your ability to purchase a home. Now keep in mind all of these numbers are based on, if you put around 5% down, you can go as little as 0% down or as high as around 20%. I also know that on top of that, you will have closing costs. So if you're putting 5% down, you're going to have fees on top of that, which includes escrow, title and lender fees. Everybody pays this. Don't worry about it. Even I pay it when I buy a house. How do you qualify? What paperwork do you need? Well, you need two years tax returns, right? If you only have one year of tax returns, then that might work. If you have a good enough FICO score in terms of your credit score, you're going to need at the, at the very least a 600 but I prefer you to have over six 60 and that's pretty much it. I can tell you pretty much how much you're qualified for within 30 minutes.