Question Details

Susan, Home Buyer in San Francisco, CA

What should your annual income be for a home priced at $1,050,000?

Asked by Susan, San Francisco, CA Mon Dec 17, 2007

If you have 20% down and excellent credit with $1500 in payments per month for car, student loans etc.

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2
Hi Susan,

I saw your answer to my question on the other thread. Thanks. Small world!

We met with our mortgage broker to discuss home prices, how much WE wanted to spend, and the the maximum home price we should consider. Essentially, it depends upon the type of mortgage you want to get and how much you have for down payment. If you annual income is at least $300K, you should be pretty comfortable. Also, keep in mind, if you have a baby/child and plan to work in any way anytime before they go to school full-time, a full-time nanny will easily run you $3500-5000 per month depending upon qualifications and the number of hours you need. "Nanny" often isn't listed as one of those monthly expenses on those worksheets even though it costs more than car and student loan payments. I don't think it affects how much you are able to borrow from the bank, but it is good to keep in mind when budgeting how much you can afford for mortgage payments per month. Afterall, the home is the long-term investment, and lots of changes in your life can occur during the long-term...

Even if you haven't selected a home to buy, yet, I would recommend meeting with a mortgage professional to set things up. This will be our 4th time purchasing a home, and the first time actually sitting down with the mortgage broker to discuss things and to ask questions, and not just "How much house can I afford?" We felt better after we met with ours, discussed how conservative we wanted to be, and worked out some numbers. This way, everyone is on the same page.

Good luck with you home search.

-Ally
0 votes Thank Flag Link Fri Dec 28, 2007
Hello Susan, the average payments on a home, priced at $1,050,000, with 20% down, would be PI (approximately $5,873/pm) with allowance for tax and insurance (variable but it would be quite a lot in CA) estimated total payment of $8,000. would need an average annual income (approximate) $280-$290K per year. Your other liabilities of $1500/pm is negligible and would not affect your front ratio. Hope this helps
Web Reference: http://www.taxcats.net
0 votes Thank Flag Link Mon Dec 17, 2007
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