How To AVOID being HOUSE POOR As A Millennial and Gen Z First Time Homebuyer 🏡

Transcript

can you afford a $300,000 home if you make $75,000 a year well let's go through the numbers if you buy a $300,000 home let's say you put down a 3% down payment plus 3% of closing cost is going to be $118,000 cash upfront then you get a 7% interest rate would put your principal and interest payment at $1,936 plus 550 a month for taxes and insurances bringing you to a grand total of $2,486 a month now let's look and see what you can qualify for $75,000 the lender is typically going to use about a 40% debt to income ratio meaning that you would have a $30,000 allowance divided by 12 putting you at $2500 a month so you barely qualify by 14 bucks but you do qualify that's if you have no debt now here's the next step can you afford it cuz if you make $75,000 a year your take-home pay after taxes 401k and health insurance is going to sit around 4,300 so this 2486 payment would take up 57% of your take-home pay so make sure you sit down with your lender and your family to make sure you can qualify and comfortably afford the payment so you don't end up house pouring