You have worked hard to make a good salary, and you are looking for a new home. You want to make sure that you get the best deal possible on the perfect house for your family. But, how much can you afford?

Many people assume that if they make $70,000 a year, they can afford a $300,000 house. But this is not always true! It also depends on your other expenses and how much debt you are willing to take on.

In this article, we will answer the question, “If I make $70,000 a year, how much house can I afford?”, and help you figure out exactly how much budget you have to set for a new home with such an income.

Understanding the 28/36 Rule in Taking Out a Mortgage Loan

When you are taking out a mortgage loan, there is a rule that lenders use to determine how much they are willing to lend you. This rule is called the 28/36 rule, and it goes like this.

  • Your monthly housing costs (mortgage payments, property taxes, insurance, homeowners’ association (HOA) dues, etc.) should not go beyond twenty-eight percent of your gross monthly income (GMI).
  • Your total debt payments (housing costs plus other debts that you have accrued, such as student and car loans) should not go beyond thirty-six percent of your GMI.

For example, if you make $70,000 a year ($5,833 per month), under the 28/36 rule, you can afford a house that costs up to $1,600 per month. This includes your mortgage payment, property taxes, insurance, and any other monthly costs, such as HOA dues.

You can also have up to $2,000 in monthly debt payments, which could include things, like a car loan or a student loan.

So, how much house can I afford with a 70K salary? The 28/36 rule is definitely a helpful tool in determining this. However, there are other factors to consider as well.

Other Factors That Affect How Much House You Can Afford

There are other factors that can affect your answer to the question, “If I make $70,000 a year, how much house can I afford?”, and these include the following.

Credit Score

This is one of the most important factors in getting approved for a mortgage loan. If you have a good credit score (700+), you will likely have a lower interest rate and be able to afford a higher monthly mortgage payment.

On the other hand, if your credit score is lower than 700, you may still be approved for a 70,000 income mortgage loan but with a higher interest rate. This could make your monthly payments too high and make it difficult for you to afford the house you want.

Debt-to-Income Ratio (DTI)

This is another important factor that lenders look at when approving you for a loan. You can calculate your DTI by dividing your total monthly debts by your GMI.

For example, if your GMI is $5,000 and your total monthly debts are $2,000, then your DTI would be 40%.

Now, for 70K a year, how much house can I afford? Lenders like to see a DTI of 36% or less. So, in this example, the lender would likely approve you for a loan but with a higher interest rate.

Ideally, you want to have a DTI of 28% or less so that you can qualify for the best interest rate possible.

Down Payment

The size of your down payment will also have an impact on how much you can spend on a new home with a 70K salary. If you make a 20% down payment, you can usually avoid having to pay private mortgage insurance (PMI).

This would make your monthly mortgage payments lower and give you more room in your budget to afford other things. However, if you don’t have 20% to put down, you may still be able to get a loan, but you will likely have to pay PMI.

PMI is insurance that protects the lender in case you default on your loan. The monthly premium is usually added to your mortgage payment.

Loan Term

The length of your loan term will also affect how much house you can afford.

If you choose a 30-year loan, for example, your monthly payments will be lower than if you choose a 15-year loan. However, you will end up paying more interest over the life of the loan. So, it’s important to consider both your monthly budget and your long-term financial goals when choosing a loan term.

So, how much mortgage can I afford with a 70,000 salary? The answer basically depends on several factors, including your credit score, DTI, down payment, and loan term. By taking all of these into consideration, you can make an informed decision about budgeting for your new home.

For more useful information about this matter, you can check out this page:

Where to Get a Loan for Your New Home

Now that we have answered the question, “What mortgage can I afford on 70K?”, it is time to start looking for a loan. There are many lenders out there that can offer you a loan for your new home.

You can start by shopping around and comparing rates from different lenders. It is also important to read the fine print and make sure you understand all of the terms and conditions before signing anything.

You can also talk to a financial advisor to get more information about taking out a mortgage loan. They can help you understand the process and make sure you are getting the best deal possible.

Types of Loans That You Can Take Out with a 70K Salary

There are many different types of loans that you can take out with a 70K salary. And, it will depend on your financial goals and the amount of money you have for a down payment.

Here are some common types of loans that people with a 70K income may qualify for.

Conventional Loan

This type of loan is a traditional mortgage that is not backed by the government. It usually has fixed interest rates and terms, which means that your monthly payments will be the same for the life of the loan.

When taking out a conventional loan, you will need to have a good credit score and a down payment of at least 20%.

Federal Housing Administration (FHA) Loan

As the name suggests, this type of loan is backed by the federal government. It is available to people with all types of credit scores, including those with bad credit.

An FHA loan usually has lower interest rates than a conventional loan, but it will require you to pay mortgage insurance, which protects the lender in case you default on your loan.

The minimum down payment for an FHA loan is usually around three and a half percent.

Veterans Affairs (VA) Loan

Like the FHA loan, a VA loan is also backed by the government, only this time it is offered by the Department of Veterans Affairs.

With very favorable interest rates and terms, this type of loan is available to veterans and active-duty military personnel.

One of the benefits of a VA loan is that you can often qualify for a no-money-down loan.

United States Department of Agriculture (USDA) Loan

This type of loan is specifically designed for people who live in rural areas and make less than a certain income threshold.

Like the other government-backed loans, the USDA loan often has very favorable interest rates and terms. You may also be able to qualify for a no-money-down loan with this type of financing.

Which Types of Homes Can You Buy with a 70K Salary?

Now that you know how much house you can afford on 70K, it is time to start looking for your dream home. There are many different types of homes that you can buy with this salary, including single-family homes, townhouses, and condos.

You can also look into purchasing a fixer-upper or a foreclosed home. These types of properties usually need some work but can be a great deal.

When searching for a home, make sure to stay within your budget and don’t overspend. It is important to remember that your monthly mortgage payments will increase if you purchase a more expensive home.


Making the decision to buy a new home is a big one! But, by doing your research and arming yourself with proper knowledge, you can make sure that you are making the best decision for your financial future.

With the information in this article, you should now know the answer to the question, “If I make $70,000 a year, how much house can I afford?” and start searching for your new home today.

If you have any more questions about taking out a mortgage loan, please leave them in the comments section below. And, for more tips that you can use in buying a home, feel free to check out the other articles on our site.

Happy house hunting!