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Old 06-28-2013, 07:53 PM
 
6 posts, read 98,257 times
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My husband and I make $150,000 a year combined. How much can we afford to spend on a new house?
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Old 06-28-2013, 08:03 PM
 
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That partly depends on how much you have saved for a down payment, and how much you plan to borrow. Generally speaking, you should have at least 20% saved for a down payment.

Seems like the basic lending "rule of thumb" is that you can typically get approved for up to 3x your annual gross income, however I think that's stretching it a bit. Shoot for borrowing no more than 2x your annual gross income and you'll be much happier in the long run.

So, that means you could easily borrow up to $300k without busting your budget. That plus your 20% down payment will get you to about $375k.
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Old 06-28-2013, 08:45 PM
 
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Thank you!
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Old 06-29-2013, 10:29 AM
 
83 posts, read 155,051 times
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Quote:
Originally Posted by Lone Star Rooster View Post
That partly depends on how much you have saved for a down payment, and how much you plan to borrow. Generally speaking, you should have at least 20% saved for a down payment.

Seems like the basic lending "rule of thumb" is that you can typically get approved for up to 3x your annual gross income, however I think that's stretching it a bit. Shoot for borrowing no more than 2x your annual gross income and you'll be much happier in the long run.

So, that means you could easily borrow up to $300k without busting your budget. That plus your 20% down payment will get you to about $375k.
And in South Carolina, $375K can get you a lot of house.
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Old 06-29-2013, 12:28 PM
 
Location: Lexington, SC
4,281 posts, read 10,284,194 times
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The old rules of thumb were 2.5 times your yearly income ($150K x 2.5 is $375). One weeks pay (gross) should cover principal, interest, and taxes $150/52 is about $2,900 per month for PIT.

For our first few homes, we paid less then we earned per year. Not sure what $150K can buy where you live, but it most certainly would be living well within your means. I say if you spent less then $300K on a home, you could well afford to live within your means.

Economics 101 says it is not how much you earn, but how much you spend........LOL
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