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What Will $75,000 and $100,000 In Income Buy?

What Will $75,000 and $100,000 In Income Buy?Many renters don’t realize how much house their income will buy in this environment, when rates are so low.

We often maximize buyer’s qualification by having them use their savings to pay off consumer debt and put less down. For example, paying off debts that total $700 in monthly payments can increase a borrower’s purchasing power by up to $125,000 in purchase price.

Below are some figures to use to help you ballpark qualification with your clients assuming they pay off their debt.
And, as a reminder, we are ALWAYS happy to send a full scenario breakdown of market rate and closing costs tailored to your client’s qualification and area of search!

With $75,000 of gross annual income, and no consumer debt:**

SFR with 3.5% down and FHA financing: $455,000 purchase price
Principle, Interest, Taxes, Insurance and MI: $2,930
Estimated Down Payment + Closing Costs: $27,900
Interest rate: 3.75%; APR: 4.90%

SFR with 20% down and Conventional financing: $540,000 purchase price
Principle, Interest, Taxes, Insurance: $2,800
Estimated Down Payment + Closing Costs: $125,500
Interest rate: 4.375%; APR: 4.49%

With $100,000 of gross annual income, and no consumer debt:**

SFR with 3.5% down and FHA financing: $605,000 purchase price
Principle, Interest, Taxes, Insurance and MI: $3,880
Estimated Down Payment + Closing Costs: $35,000
Interest rate: 3.75%; APR: 4.9%

SFR with 20% down and Conventional financing: $730,000 purchase price
Principle, Interest, Taxes, Insurance: $3,730
Estimated Down Payment + Closing Costs: $162,500
Interest rate: 4.25%; APR: 4.34%

**Assumptions: 1.25% Property Tax Rate and $0 Transfer Taxes per most of Contra Costa County; Property Taxes & Homeowner’s Insurance Impounded; 740 Credit Score; Single Family Home.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167