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I make 70000 a year: How much house can I afford

Inside: This guide will teach you about the different factors you need to consider when purchasing a home with a 70k salary.

There are a lot of factors to consider when you’re trying to figure out how much house you can afford. Your income, your debts, your down payment, and the interest rate on your mortgage all play a role in determining how much house you can afford.

Your situation will be different than the person next-door or your co-coworker.

Making 70000 a year is a great salary. You are making the median salary in the United States.

It’s enough to comfortably afford most homes and gives you plenty of room to save money each month.

But how much house can you actually afford?

It depends on several factors, including your down payment, interest rate, income, and credit score.

In this ultimate guide, we’ll walk you through everything you need to know about how much house you can afford making 70000 a year.

Are you looking to buy a house but don't know where to start? This guide will teach you everything you need to know about buying a home, from Loan amount to Homeowner insurance premiums. By the end of this guide, you'll know that when I make 70000 a year how much house can I afford.

how much house can i afford on 70k

In general, you can expect to spend 28-36% of your income on housing.

Generally speaking, if you make $70,000 a year, you can afford a house between $226,000 and $380,000.

How much mortgage on 70k salary?

Picture of a calculator and toy house for how much mortgage on 70k salary.

In general, you should expect to spend no more than 28% of your monthly income on a mortgage payment.

Thus, you can spend approximately $1633-2100 a month on a mortgage.

Just remember this is relative to the interest rate, term length of the loan, down payment, and other factors.

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28/36 Rule

Picture of house keys to explain the 28/36 rule

But there’s one factor that trumps all the others: The 28/36 rule.

Also known as the debt-to-income (DTI) ratio.

The 28/36 rule is a guideline that says that your housing costs (mortgage payments, property taxes, homeowners insurance, and HOA fees) should not exceed 28% of your gross monthly income.

And your total debt (housing costs plus any other debts you have, like car payments or credit card bills) should not exceed 36% of your gross monthly income.

You must follow the 28/36 rule.

How to calculate how much mortgage you can afford?

A picture of spreadsheet and a calculator to see how much mortgage can I afford.

If you’re like most people, you probably don’t know how to calculate how much mortgage you can afford.

This is actually a really important question that you need to ask yourself before beginning the home-buying process.

The answer will help determine the price range of homes you should be looking at. Plus know how much money you’ll need to save for a down payment.

Step #1: Check Interest Rates

Research current mortgage rates to get an accurate estimate. You can also check your credit score and search for average mortgage rates based on your credit score.

Right now, with sky-high inflation, you are unable to afford a bigger house when interest rates are hovering around 6% compared to ultra-low interest rates of 2.5%.

With a 70k salary, this can be the difference between $50-100k on the total mortgage amount you can afford.

Step #2: Use a Mortgage Calculator

Use a mortgage calculator to get an estimate of the home price you can afford based on your income, debt profile, and down payment.

Generally, lenders cap the maximum amount of monthly gross income you can use toward the loan’s principal and interest payment to not more than 28% of your gross monthly income (called the “Front-End” or “Housing Expense” ratio). Then, limit your total allowable debt-to-income ratio (called the “Back-End” ratio) to not more than 36%.

You can use a mortgage calculator to a ballpark range of what house you can afford.

Step #3: Taxes, Insurance, and PMI

When planning for a home purchase, it’s important to factor in all of your monthly expenses, including taxes, insurance, and PMI.

This will ensure that you get an accurate estimate of your home-buying budget based on your household annual income.

Don’t forget to include these payments to get a realistic understanding of your monthly budget.

Step #4: Remember your Living Expenses

When considering how much house you can afford based on your $70,000 salary, you must consider your lifestyle and current expenses.

It is important to factor in other monthly expenses such as cell phone and internet bills, utilities, insurance costs, and other bills.

More than likely, you will be approved for a higher mortgage amount than you would feel comfortable with. This is 100% what lenders will do.

They want to provide you with the most you can afford – not what you should afford.

Step #5: Get prequalified

Prequalifying for a mortgage is an important first step to take when estimating how much house you can afford.

It gives you a more precise figure to work with and helps you make a more informed decision based on your personal situation.

Remember that your final amount will vary depending on several factors, especially your interest rate, which will be based on your credit score.

Taking the time to research current mortgage rates helps you secure a better mortgage rate, giving you more buying power.

Home Buying by Down Payment

Picture of a house on top of cash for home buying by down payment.

How much house can you afford?

It’s a common question among home buyers — especially first-time home buyers. Use this table to figure out how much house you can reasonably afford given your salary and other monthly obligations.

The assumption is 30 year fixed mortgage, good credit (690-719), no monthly debt, and a 4% interest rate.

Annual IncomeDownpaymentMonthly PaymentHow Much House Can I Afford?
$70,000$9,552 (3%)$1,750$318,412
$70,000$16,215 (5%)$1,750$324,316
$70,000$34,058 (10%)$1,750$340,581
$70,000$53,573 (15%)$1,750$357,152
$70,000$75,094 (20%)$1,750$375,468
$70,000$98,933 (25%)$1,750$395,731
**Your own interest rate, monthly payment, and how much house you can afford will vary on your personal circumstances.

Mortgage on 70k Salary Based on Monthly Payment and Interest Rate

Picture of someone showing you how much mortgage on 70k salary you can afford.

How much house can you afford on a $70,000 salary?

This largely depends on the current interest rate of the mortgage loan you’re considering. When interest rates are high, people aren’t actively buying as when interest rates are low.

By understanding these factors, you can better gauge how much house you can afford on a $70,000 salary.

The assumption is 30 year fixed mortgage, good credit (690-719), no monthly debt, and a 20% downpayment.

Annual IncomeMonthly PaymentInterest RateHow Much House Can I Afford?
**Your own interest rate, monthly payment, and how much house you can afford will vary on your personal circumstances.

Home Affordability Calculator by Debt-to-Income Ratio

Picture of a calculator and toy house for the home affordability calculator by debt-to-income ratio.

Around here at Money Bliss, we always stress that debt will hold you back.

In the case of buying a house, debt increases your DTI ratio.

Here is a glimpse at what monthly debt can cause your debt-to-income (DTI) ratio to increase. Thus, making the house you want to buy to be more difficult.

Annual IncomeMonthly PaymentMonthly DebtHow Much House Can I Afford?
**Your own interest rate, monthly payment, and how much house you can afford will vary on your personal circumstances.

Increase your Home Buying Budget

Picture of cash for ways to increase your home buying budget.

Here are a few ways you can increase your home buying budget when buying a house on a $70k annual income.

By following these steps, you can increase your home buying budget and find a more suitable house for your income.

1. Pick a Cheaper Home

Home prices vary significantly in different parts of the country.

Moving out of a major metropolitan area with notoriously high housing costs can help you find more affordable homes.

There are plenty of ways to find a home that is cheaper than you would normally expect.

  • Look for homes that are for sale in less desirable neighborhoods.
  • Find homes that are for sale by owner or have not been listed yet.
  • Check for homes that are for sale outside of your usual price range and haven’t sold as they may drop their price.
  • Move to a lower cost of living area.

2. Increase Your Down Payment Savings

A larger down payment can reduce the amount you have to finance, which lowers your monthly payment.

Plus helps you get a lower interest rate and avoid paying PMI.

Putting down at least 10-20 percent of the home sale price can help boost your home buying power. You can also take advantage of down payment assistance programs in your area.

3. Pay Down Your Existing Debt

Paying down your debts such as credit card debts or auto loans can help raise your maximum home loan.

Paying down your debts can help you qualify for a higher loan amount.

This is because when you have lower amounts of debt, your credit score is higher and your debt-to-income ratio is less. This means you are less likely to be rejected for a home loan.

4. Improve Your Credit Score

A higher credit score can lead to lower rates and more affordable payments.

You can improve your credit score by:

  • Paying your bills on time
  • Paying down your credit card balances
  • Avoiding opening new credit before applying for a mortgage
  • Disputing any errors on your credit report

This is very true! We had an unfortunate debt that wasn’t ours added to our credit report right before closing. While the debt was an error, it still cost us a higher interest rate and forced us to refinance once the credit report was fixed.

5. Increase Your Income

Asking for a raise, seeking a higher-paid position, or starting a side gig can help you increase the amount of home you can afford.

While you need two years of income from a side gig or your own online business to count as income, the extra cash earned helps you to increase the size of your downpayment. Plus it lowers your debt-to-income ratio with the savings you are setting aside.

What factors should you consider when deciding how much you can afford for a mortgage?

How much house can you afford on your current salary and with your current monthly debts?

This is a question that we are often asked, and it’s one that we love to answer.

We’ll walk you through all the different factors that go into this decision so that you can make an informed choice.

1. Loan amount

The loan amount is a key factor that affects the total cost of a mortgage.

If you have no outstanding debt, a 20% down payment, a high credit score, and a 3.5% interest rate from an FHA loan, you could be able to afford up to $508,000.

However, if you have debt, a smaller down payment, or a lower credit score, the loan amount you can qualify for will be lower.

Similarly, if you choose a 15-year fixed-rate loan, your monthly payments will be higher, but you will end up paying less in interest over the life of the loan than with a 30-year fixed-rate loan.

Ultimately, your loan amount will affect the total cost of your mortgage, so it’s important to consider all the factors when making your decision.

2. Mortgage Interest rate

Mortgage interest rates can have a significant impact on the cost of a mortgage. The higher the interest rate, the more expensive the loan will be.

For example, a difference between a 3% and 4% interest rate on a $300,000 mortgage is more than $150 on the monthly payment.

Remember, in the first few years of a mortgage, the majority of the payment goes toward interest rather than trying to reduce the principal amount.

3. Type of Mortgage

The primary difference between a fixed and variable mortgage is the interest rate and the amount of your payment

  • Fixed-rate mortgages offer the stability of having the same interest rate for the life of the loan.
  • Adjustable-rate mortgages (ARMs) come with lower interest rates to start, but those rates can change over the life of the loan. ARMs are often a riskier choice, as if the economy falters, the interest rate can go up.

Fixed-rate loans are typically the most popular choice, as the monthly payment amount is more predictable and easier to budget for. The terms of a fixed-rate loan can range from 10 to 30 years, depending on the lender.

Adjustable-rate mortgages (ARMs) have interest rates that can increase or decrease annually based on an index plus a margin. ARMs are typically more attractive to borrowers who plan on staying in the home for a shorter period of time, as the lower initial interest rate can make the payments more manageable.

The Money Bliss recommendation is to choose a 15-year fixed-rate mortgage.

4. Property value

Property value can have a direct effect on how much you can afford for a mortgage.

As the value of the property increases, so does the amount of money you will need to borrow to purchase it. This, in turn, affects the monthly payments and the amount of interest you will pay over the life of the loan.

This is especially important as many people have been priced out of the market with the rising home prices.

Additionally, higher property values can mean higher taxes, which will add to the amount you need to budget for your mortgage payments.

5. Homeowner insurance

Homeowner’s insurance is a requirement when securing a loan and it can vary depending on the value and location of the home.

Additionally, certain areas that are prone to natural disasters or are located in densely populated areas may have higher premiums than other locations and may require additional insurance like flood insurance.

As a result, lenders typically require that you purchase homeowners insurance in order to secure a loan, and may have specific requirements for the type or amount of coverage that you need to purchase.

Before committing to a mortgage, it is important to consider the cost of homeowner’s insurance and make sure it fits into your budget.

This is something you do not want to skimp on as the cost to replace a home is very expensive.

6. Property taxes

Property taxes are calculated based on the value of a home and the tax rate of the city or county where the property resides.

The higher the property taxes, the more you will have to pay in your monthly mortgage payment.

In states with high property taxes, the property tax bill can be a large sum of the mortgage payment.

It is important to consider these costs when comparing different homes and locations to ensure you can afford the home without stretching your budget too thin.

7. Home repairs and maintenance

It’s important to also consider other factors such as the age of the house, since some properties may require renovation and repairs that can cost more than the house price itself.

Beyond the cost of purchasing a home, homeowners will likely have other expenses related to owning and maintaining the property.

Also, many homeowners prefer to do significant upgrades to the home before moving in, which comes at an additional expense.

These can include ordinary expenses such as painting, taking care of a lawn, fixing appliances, and cleaning living spaces, which can add up.

Additionally, it’s advisable to buy a home that falls in the middle of your price range to ensure you have some extra money for unexpected costs, such as repairs and maintenance.

8. HOA or Homeowners Association Maintenance

This is often an overlooked factor by many new homebuyers, but extremely important as some HOAs add $500-800 per month to the total housing budget.

The purpose of a homeowners association (HOA) is to establish a set of rules and regulations for residents to follow as well as maintain the community or building.

These fees are typically used to pay for maintenance, amenities, landscaping, and concierge services.

HOA fees are used to finance community upkeep, including landscaping and joint space development, and can range from $100 to over $1,000 per month, depending on the amenities in the association.

9. Utility bills

When switching from renting to buying a home, you will have to factor in the costs of your monthly utility bills such as electricity, natural gas, water, garbage and recycling, cable TV, internet, and cell phone when calculating how much mortgage you can afford.

In addition, the larger the home, the higher the costs to heat and cool your new home.

Make sure to ask your realtor for previous utility bills on the property you are interested in.

10. Private Mortgage Insurance

The purpose of private mortgage insurance (PMI) is to protect the lender in the event of foreclosure. It is typically required when a borrower is unable to make a 20% down payment on a home purchase.

PMI allows borrowers to purchase a home with less upfront capital but also comes with additional monthly costs that are added to the mortgage payment. These fees range from 0.5% to 2.5% of the loan’s value annually and are based on the amount of money put down.

PMI can also be canceled or refinanced once the borrower has achieved 20% equity in the home or when the outstanding loan amount reaches 80% of the home’s purchase price.

11. Moving costs

Moving is expensive, but also a pain to do. So, consider the moving costs associated with relocating from one location to another.

Typically fees for packing, transportation, and possibly storage, and can vary depending on the size of the move and the distance the move needs to cover.

Also, consider if by buying a home, you will stop having moving costs associated with moving from rental to rental.


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eMortgage® shops home loans across multiple lenders to help you find a mortgage rate that fits your needs.

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When determining how much house you can afford, it’s important to consider several factors.

These include your income, existing debts, interest rates, credit history, credit score, monthly debt, monthly expenses, utilities, groceries, down payment, loan options (such as FHA or VA loans), and location (which affects the interest rate and property tax). Also, think about the costs of maintaining or renovating a home.

Additionally, you should also evaluate your own budget and assess whether now is the right time to purchase a home. Taking all of these factors into account can help you set the maximum limit on what you can realistically afford.

A mortgage calculator can help you determine your home affordability by providing an estimate of the home price you can afford based on your income, debt profile, and down payment.

It works by inputting your annual income and estimated mortgage rate, which then calculates the maximum amount of money you’re able to spend on a house and the expected monthly payment.

Additionally, different methods are available to factor in your debt-to-income ratio or your proposed housing budget, allowing you to get a more accurate estimate of your home buying budget.

The debt-to-income ratio or DTI is used by lenders to assess a borrower’s ability to make mortgage payments.

This ratio is calculated by taking the total of all of a borrower’s monthly recurring debts (including mortgage payments) and dividing it by the borrower’s monthly pre-tax household income.

  • A high DTI ratio indicates that the borrower’s debt is high relative to income, and could reduce the amount of loan they are qualified to receive.
  • Generally, lenders prefer a DTI of 36% or less, which allows borrowers to qualify for better interest rates on their mortgages.

To calculate their DTI, borrowers should include debt such as credit card payments, car loans, student and other loans, along with housing expenses. It is important to note that the DTI does not include other monthly expenses such as groceries, gas, or current rent payments.

Closing costs can have an enormous impact on how much home you’re able to afford.

From application fees and down payments to attorney costs and credit report fees, these costs can add up quickly and affect your overall budget. Unfortunately, most of these closing costs are non-negotiable, but you can ask the seller to pay them.

When buying a house, it is important to research the different mortgage options available to you.

You can typically choose between a conventional loan that is guaranteed by a private lender or banking institution, or a government-backed loan. Depending on your monthly payment and down payment availability, you may be able to select between a 15-year or a 30-year loan.

  • A conventional loan typically offers better interest rates and payment flexibility.
  • While a government-backed loan may be more lenient with its credit and down payment requirements.
  • For veterans or first-time home buyers, there may be special mortgage options available to them.

Ultimately, it is important to talk to a lender to see which loan type is best for your personal circumstances.

When it comes to saving for a down payment, it’s important to understand how much you’ll need and how much it will affect your budget.

Generally, you’ll need 20% of the cost of the home for a conventional mortgage and 25% for an investment property. When you put down more money, it gives you more buying power and may help you negotiate a lower interest rate.

For example, if you’re buying a $300,000 house, you’ll need a down payment of $60,000 for a conventional mortgage. On the other hand, if you put down 10%, you can still afford a $395,557 house. But, you will have to pay for private mortgage insurance.

In addition, there are other ways to help you cover these upfront costs. You can look into down payment assistance programs.

Ultimately, the size of your down payment will depend on your budget and financial goals. You should never deplete your savings account just to make a larger down payment. It’s important to factor in emergency funds and other expenses when deciding on the best option.

Eligibility requirements for loan lenders can vary, but in general, lenders are looking for borrowers with a good credit score, a reliable income, and a history of employment or income stability.

For most loan types, borrowers will need to show a history of two consecutive years of employment in order to qualify. However, lenders may be more flexible if the borrower is just beginning their career or if they are self-employed and do not have W2 forms and official pay stubs.

Income verification also needs to be done “on paper”, meaning that cash tips that do not appear on pay stubs or W2s can not be used as income. The lender will look at the household’s average pre-tax income over a two-year period before determining the amount that can be borrowed.

In order to make sure that the borrower is financially secure, lenders will also pull the borrower’s credit report and base their pre-approval on the credit score and debt-to-income ratio. Employment verification may also be done.

For certain government-backed loan types, such as FHA, VA, and USDA loans, there may be additional or different requirements for eligibility. For instance, for FHA loans, the borrower must intend to use the home as a primary residence and live in it within two months after closing. VA loans are more lenient, and may not require a down payment.

The qualifications for VA loans vary based on the period and amount of time the borrower has served. There are many ways to qualify, whether the borrower is a veteran, active duty service member, reservist, or member of the National Guard. For more information on eligibility requirements for VA loans, borrowers can visit the U.S. Department of Veteran Affairs.

A good credit score will mean you have access to more lending options, better interest rates, and more purchasing power.

On the other hand, a poor credit score could mean you are approved for a loan, but at a higher interest rate and with a smaller house.

This means your budget will be more limited and you may not be able to buy as much home as you had hoped for. Additionally, lenders will also look at other factors, such as your debt-to-income ratio, employment history, and loan term, in order to determine your overall affordability.

What House Can I Afford on 70k a year?

Picture of someone holding a house for what house can I afford on 70k a year.

As a borrower, you need to consider the interest rate, down payment, credit score, debt-to-income ratio, employment history, and loan term when determining how much house you can afford.

A higher credit score can often mean a lower interest rate, and a larger down payment can bring down the monthly payments.

All of these factors can have an effect on the amount of money you can borrow and the home you can afford.

Ultimately, understanding the impact of different factors can help borrowers make the best decisions when it comes to getting a mortgage.

Now that you know how much house you can afford, it’s time to start saving for a down payment.

The sooner you start saving, the sooner you’ll be able to move into your dream home. But you may have to wait if you are considering a mansion.

By taking into consideration this guide into account, you can make a more informed decision about the cost of a mortgage for your new home.

It may take a couple of months to budget when planning to get a house.

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