How Much House Can You Afford with a $150k Salary and a 3.5% Down Payment? 🏡💸

Dreaming of a new home in the Twin Cities or anywhere across North America? If you’re earning $150,000 a year, you’re in a solid position to start your house hunt. But how much house can you actually afford—especially if you’re planning to put down just 3.5%? Let’s walk through the numbers and the real-life factors that shape your budget.

Using my mortgage calculator and assuming you have minimal existing debts, a $150k salary with a 3.5% down payment and a typical debt-to-income (DTI) ratio of 36% means you could afford a home priced around $400,000. But as with any big financial decision, there’s more to the story than a single number!

🧠 What Impacts Your Home Buying Power?

📊 Credit Score

Your credit score is like your financial reputation. A higher score can unlock better mortgage rates, saving you thousands over the life of your loan. FHA loans, which allow for down payments as low as 3.5%, are a popular choice for buyers with good—but not perfect—credit.

💸 Down Payment

With a 3.5% down payment, you’re looking at programs like FHA loans. For a $400,000 home, that’s about $14,000 upfront. Remember, putting down less than 20% usually means you’ll pay mortgage insurance, which adds to your monthly payment.

📉 Debt-to-Income Ratio

Lenders want to see that your monthly debts (including your new mortgage) won’t eat up more than 36%–43% of your gross income. If you have student loans, car payments, or credit card debt, those will factor into how much home you can buy.

🏡 Local Market Conditions

Home prices in the Twin Cities can vary by neighborhood, school district, and proximity to downtown. In some areas, $400,000 might land you a move-in-ready single-family home, while in others, it could mean a charming townhouse or condo.

💡 Real-Life Example

Let’s say you find a home for $400,000 in Minneapolis. With a 3.5% down payment and a competitive interest rate, your monthly payment (including mortgage insurance, taxes, and fees) could be around $2,800–$3,200. It’s smart to run the numbers with your lender and see what feels comfortable for your lifestyle and long-term goals.

✨ Tips for Maximizing Your Budget

• Boost your credit score before applying for a loan.
• Shop around for lenders—rates and fees can vary.
• Factor in property taxes, insurance, and maintenance.
• Consider neighborhoods with up-and-coming value.

Buying a home is a big step, but with the right strategy, your $150k salary and a modest down payment can open many doors. Ready to explore what’s out there? I’m here to help you navigate the process and find a home that truly fits your dreams and your budget!