How Much Income is Needed to Afford Real Estate in Tri-Cities WA?
Median home values amid the state of Washington are currently at $370,700, so how much real estate in Tri-Cities WA you can afford will heavily depend on how much annual income you have and your current debt levels. Essentially, the basics of knowing how much income you need depends on a simple mathematical approach commonly utilized by lenders.
Since buyers pay for a home typically with a combination of a bank loan and a down payment:
Down Payment + Biggest Loan You Can Get + Monthly Payment Qualification = How Much Home You Can Afford
The general rule of thumb to qualify for a home loan is to ensure that the monthly mortgage payments required don’t exceed three times your annual pre-tax household income. However, this can change if you carry excessive debt. Those with no or little debt and a 20% down payment can often qualify for a loan up to four times their income especially with good credit.
Of course, this will also depend on the type of loan or mortgage you qualify for. Veterans, low income families and those considering moving to a rural area may qualify for government guaranteed loans with low or no down payments required with generous interest terms.
However, those who need to calculate a down payment for traditional fixed-rate or ARMs should get as close to 20% as possible of the total purchase price accumulated for looking at real estate in Tri-Cities WA in order to secure the best interest rates and to keep those monthly mortgage payments low.