To afford a $700,000 home, buyers typically need an annual income between $175,000 and $235,000. This estimate is based on standard loan terms, average interest rates, and a modest down payment. The 28/36 rule suggests monthly housing costs should remain within 28% of gross income, while total debt should not exceed 36%. In practical terms, if housing costs reach approximately $4,735 monthly, an income of about $203,000 is necessary. Additional debts or high property expenses can further elevate these requirements.
Most buyers need to earn $175,000 to $235,000 per year to afford a $700,000 home. This assumes average interest rates, a standard loan term, and a modest down payment.
Using the 28% rule, monthly housing costs should not exceed 28% of gross monthly income, while total monthly debt should stay below 36% according to the 36% rule.
In a scenario with a total estimated monthly housing cost of about $4,735, a buyer would need around $203,000 annually to qualify comfortably.
Income requirements may increase if the borrower has higher debt levels or lives in areas with elevated property taxes or insurance costs.
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