A lot of my real estate network is always asking me about what the market is like and how much can they afford. I'd like to put this scenario up so that everyone can gauge their affordability, depending on their income.
If we assume an average working-class buyer in San Diego (family/single/domestic partnership) is making a very conservative income, we have the following example assumptions:
- income: $55,000 per year (household)
- interest rate: 6.5% on 30-year fixed
- Mortgage Debt-to-income: 35% of gross income (the percentage the mortgage occupies on gross monthly)
- Estimate Mortgage: $1650
- Suggested Home purchase: $260,000
So an average household earning a conservative $55,000 should be able to afford a $260,000 home.
Are there any $260,000 single family, detached homes in San Diego? YOU BET!!! My clients have seen them starting around $210,000 and that was middle of summer 2008, so I'm sure we can find some even lower than $200,000.
BTW, for all you new to working with us at Agent619.com, a quick way to figure out your mortgage is to use the $7 dollar rule. Which means for every $100 you borrow, $7.00 is your monthly mortgage. For example a $100,000 home loan will be $700 per month. A $200,000 home will cost you $1400 a month.
Hopefully you can feel at ease about eye balling your mortgage based on how much your home costs. I'd love the opportunity to teach you more about the little secrets and shortcuts about real estate in San Diego, so please feel free to contact me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
