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How Much Income do You Need to Buy a $650,000 House?

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You’ve got your eye on the perfect house. In fact, it is the house of your dreams, but it comes with a big price tag. You don’t know if you can afford it, so you start to wonder just how much income do you need to buy a $650,000 house?

How Much Income do You Need to Buy a $650,000 House?

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Depending on the part of the country you live in, $650k might not even be an expensive home. It could be a small bungalow that will barely fit all of your possessions.

Of course, if you live in a small, rural area like I do, then $650,000 dollars for a house is going to be the nicest one in town by far.

It also going to have the highest property taxes as well.

But let’s forget the mortgage payment and working with lenders to get loans and all that nasty stuff.

Let’s just figure out how much money you need to buy this beauty.

Okay, let’s assume you will put 20 percent down because you don’t want to pay for private mortgage insurance, so you will actually be financing $520,000 dollars.

Let’s also assume that you get a 4.5 percent interest rate and a traditional mortgage of 30-year duration.

When we put all of those assumptions together, you would need to make $119,000 per year.

Also, your monthly mortgage payment would be $2,784 dollars.

That monthly payment, of course, would not include property taxes, maintenance, landscaping, and upkeep.

It would also not include your closing costs.

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Salary to Afford a 1.5 Million Dollar Home

Let’s say you really want something a little bigger and that $650k house just isn’t going to do it for you. 

The monthly payment isn’t an issue for you and you want to throw caution to the wind.

You’ve got your eye set on that pretty $1.5 million dollar house down the road and by gosh, you’re going to buy it.

But just how much do you need to make annually to make that dream a reality?

You would need to be pulling down a cool $267,000 dollars per year.

Your monthly payment for your mortgage would be $6,230 that is with a 4.5 interest rate and a 30-year mortgage and a down payment of $300,000 dollars.

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Income to Afford a 15 Million Dollar House

As they say, go big or go home.

So, forget the1.5million dollar home. Drive right by the 5 million dollar house, and don’t even bother calling to ask about the ten million dollar house you saw on TV.

Head right over to the 15 million dollar home and give it a test drive.

Sure, it is true that most lenders won’t offer loans that will cover 15 million dollars. You’ll have to get a jumbo loan, but what the heck, you don’t mind paying a bit more when it comes to closing costs or your monthly mortgage payment.

You’re living large, so go for it.

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To buy this baby you’re going to need to make $3.5 million dollars per year and your monthly mortgage payment will be $81,854 dollars each and every month.

The truth is when you’re buying a home you want to make sure it is one you can afford. Don’t let the lenders or real estate agents talk you into a more expensive home than you need.

Take the time to check out many properties and make a budget before you go. Make sure the purchase price is in your budget and stick to it.

That’s how you can get the home of your dreams and not have it turn into a nightmare down the road.

To Sum it All Up:

Real estate is expensive and you might be surprised just how much you need to make a year to get a mortgage lender to loan you the money you need for a 30-year fixed-rate mortgage. For a $650k house, you will need to make at least $119,000 dollars per year to really be able to afford it.

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