$2,500 RENT vs $2,500 MORTGAGE | Why BUYING Is More Difficult Than RENTING 🤔🏡

Transcript

you can afford $2,500 a month in rent why can't you qualify for a $2,500 mortgage well let me show you why when it comes to the $2,500 rent they typically want two to three times the rent in income which is kind of ridiculous if you ask me which would be 60,000 this example and then they want you to have decent credit but if you're carrying $500 a month at a car payment $500 a month in student loans and $200 a month in credit cards your landlord doesn't care but when you go to buy a house this debt really matters and this $2,500 isn't just the principle and interest it's also the property tax homeowners insurance potential HOA and potential private mortgage insurance so to qualify for $2,500 a month you would need to earn about $80,000 cuz the lender is going to typically give you about a 40% debt to income ratio giving you a monthly allowance of $2,667 so you would barely qualify but you could qualify however if you're carrying this $1,200 a month in debt payments they subtract it from your allowance bringing this down to just $1,467 so you would no longer qualify in fact with this amount in this debt you'd only qualify for about $180 to $200,000 home that's why it's important to work on paying off your debt or raising your income if you're looking to purchase a house