How Much House Can I Afford on $87,000 a Year?
The answer to the question “how much house can I afford on $87,000 a year” is dependent on several factors, including your salary and debt-to-income ratio. A person with a salary of $80,000 should look for homes in the $240,000-$320,000 price range.
The calculator used for this calculation takes into account a person’s debts, property taxes, and other monthly expenses. The calculator also breaks down the mortgage payment into principal and interest. A mortgage payment of 28% or less would be within the range for an 87,000-per-year income.
In addition, you must account for the cost of living in your area. Since costs of living in every state vary widely, it is not always easy to determine how much house you can afford on 87,000 a year. You can consider using a financial planner to help you figure out a reasonable price range for your income.
The FHA has a rule of thumb for how much you can afford depending on your income. For example, a person earning $70,000 a year should be able to spend $1,692 per month for a house, and up to $2,391 if they wish to rent.
To calculate your affordability, you can use two calculators. One is specifically designed for the U.S., while the other is geared toward international buyers. The calculator can estimate the amount of house you can afford based on your current income and debt ratio. The calculators also allow you to enter fixed monthly budgets.