If you’re finally ready to look into purchasing property but don’t know how much house you can afford, you’ve come to the right article. No more landlords, rent increases, and noisy upstairs neighbors in your apartment in Portland, OR: just you and your future home. But first, you need to first figure out how much house you can afford with your $90,000 a year salary.
Using Redfin’s mortgage calculator, on a $90,000 a year salary with zero current debts, 20% down payment, and a 36% debt-to-income ratio, you’ll be looking at homes valued at $370,000 and below. Of course, this is a quick answer to a more complex question. How much house you can afford on a $90,000 a year salary depends on a variety of factors that will be explored in this Redfin Real Estate article.
Factors that affect what you can afford
What’s your credit score?
How large of a down payment can you afford?
What’s your debt-to-income ratio?
What are the current interest rates?
Where are you trying to live?
How much work does the house need?
The bottom line: know what you can afford
What’s your credit score?
If you’re paying cash for your house, skip this section. Sellers don’t really care about your credit score as long as you can pay for the house in full. However, if you’ll need financing to move into your new home – like most Americans – your credit score can play a large role in what you can afford.
- Exceptional (800+): You qualify for the best rates available and can have your pick of lenders.
- Very good (740-799): These borrowers also tend to qualify for high-quality interest rates
- Good (670-739): This is where you’ll start to see a slight increase in interest rates, but this range is considered favorable.
- Fair (580-669): Interest rates in this range can start to increase more.
- Poor (579 or lower): If you’re in this range, you’ll pay significantly more in interest, and securing a mortgage can become much harder.
Don’t…