Can You Even Afford to Buy a Home With a $100K Salary?

Tharon Green/CNET In today's expensive housing market, it's not a mystery why someone making $100,000 a year would see homeownership as out of reach. With more than two decades as a real estate professional, I tell my clients to be honest about what fits their financial reality, not just the bank's formulas. Unless you're buying a home with cash (unlikely), it's valid to ask if you can afford to take out a mortgage on an above-average salary. Let's start by making a key distinction. The amount you borrow for your home loan and the amount you qualify for are different. Although a lender may approve you for a large loan, that doesn't mean it's a smart financial move for your life or budget. The key is understanding how much you can borrow, your monthly budget and home prices in your local market, not just nationally. You'll also need to understand debt-to-income ratios and what goes into your mortgage payment beyond your interest rate alone. What is gross salary vs. disposable incom ... Read full article.