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How Much House Can I Afford? (Review)

Updated: Aug 25, 2020, 12:03pm
Sebastian Obando
Sebastian Obando contributor
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How Much House Can I Afford? (Review)

According to the census bureau, the median selling price for a new home in September 2019 was $299,400. Unless you have this kind of money lying about, getting a mortgage is your only option if you want to buy a home.

You’re not alone. According to the NAR’s annual trends report, 88% of home buyers financed their purchase in 2018, borrowing a median 87% of the purchase price.

While a mortgage is a reality for most, it raises two critical questions. First, how much house can you afford? Second, and arguably more important, how much should you spend on a house.

The first question often comes down to how much you can borrow. This in turn depends on a number of factors, including your income, credit score, other debts and your down payment. The second question is more nuanced. Just because you qualify for a large mortgage, doesn’t mean taking it out is a smart move.

We’ll tackle both of these questions.

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Sebastian Obando
Sebastian Obando
contributor

Based in New York City and previously Washington D.C., I cover personal finance related topics. I graduated from the Philip Merrill College of Journalism at the University of Maryland in 2018.

First Published: Aug 25, 2020, 12:03pm
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