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There are just too many variables to consider a first-time buyer as a monolith. Which is why when we asked real estate agents how much a buyer would spend on a first home in the D.C. Some will spend much less on their first home, others will spend significantly more. Walsh says to run the numbers based on your budget and unique circumstances. You can use a mortgage calculator to plug in your current income and monthly financial obligations to see exactly how much home you can afford.
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Just because home prices are elevated doesn’t mean you can’t achieve your goal of home ownership. Believe it or not, but the median home price in the U.S. in Q was $429,000. That means that most folks were getting mortgages for homes that cost more than $400,000. That number may seem like it's a challenge to afford, but it's still possible, even in the current environment. There are several steps you can take to improve your ability to afford a home priced at $400,000 or more. Saving for a down payment, reducing personal debts, and managing your credit score are just a few ways to make affording a home priced around the median U.S. home price.
Irvine, California
If you still can’t find a desirable house in your budget, you might consider looking at condominiums. Condos are often more affordable than single-family houses and come with neighborhood amenities, outdoor maintenance, landscaping and even utilities in some cases. If you find a desirable home in this price range, you’ll need to put in an offer quickly. A tightening inventory nationwide has increased buyer competition and pushed prices higher, so it might be challenging to get your purchase offer accepted. Among the top states with the most new builds, Texas takes the No. 6 spot with 9.01 homes built per 1,000 residents.
What's the monthly payment for a $400k house?
It may also improve your purchase offer because the seller knows you have a good chance at getting your home loan. Some of the best-known cities in the U.S. offer homes within our $300K target. You can buy an affordable single-family house in St. Louis, Pittsburgh, New Orleans, Cincinnati, Cleveland and Memphis in this price range. While these big cities all score highly for amenities, nightlife and diversity, they also tend to get poor marks in important areas like schools, crime, jobs and cost of living.
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You can continue reading to get specific advice or apply for a mortgage pre-approval. A mortgage pre-approval is a common first step that homebuyers take to begin their journey to a new home. Buying a move-in-ready home in this price range requires working with an experienced real estate agent. Before you get in touch with one, create a list of features you want in a home. For instance, these may include the number of bedrooms and bathrooms, proximity to good schools and whether you’re willing to buy a fixer-upper. A real estate agent with experience in the area can show you new properties in your price range or even off-market home listings.
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The home size difference between Cleveland and Toledo is roughly 200 square feet, so you can still get a 4,272-square-foot home for $400,000 in Cleveland. Different types of mortgages also have different minimum credit score requirements. And that can be a barrier to an uber-low down payment if your score is low.
What do down payment options look like for a $400,000 mortgage?
Houses in Abilene typically come with three or four bedrooms and at least two bathrooms, measuring around 1,695 square feet on average. Brand-new properties in Abilene are often at the top of the price range but typically come with hardwood, tile or laminate flooring and new appliances. The following cities have strong housing markets, desirable amenities and general affordability. The credit score needed to buy a house with no down payment can vary depending on the type of loan and lender.
This is how much money you need to earn annually to comfortably buy a $400,000 home in 2024
Abilene currently boasts 52 new-construction listings among single-family houses in the $200,000 to $300,000 price range. According to NAR, the median sales price on single-family houses in Green Bay, Wisconsin, is $257,600. Homes in this area have seen price gains for three years, which works in your favor when you’re ready to sell.
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You’ll likely need to make about $111,000 a year to buy a $400K house. This is an estimate, but, as a rule of thumb, with a 3 percent down payment on a conventional 30-year mortgage at 7 percent, your monthly mortgage payment will be around $2,600. Keep in mind this figure doesn’t include home insurance or housing expenses. Also, your home buying budget will vary depending on your credit score, debt-to-income ratio, type of loan, mortgage term, and interest rate. Some loan programs, such as certain types of conventional loans and government-backed loans (e.g., FHA loans), offer down payment options as low as 3%.
For example, if you earn $5,000 in pre-tax income and have $300 in debt repayment, then your mortgage payment shouldn’t exceed $1,500. Because many first-time buyers struggle to scrape together a down payment, Realtor.com calculated the costs of a $400,000 home based on a 3 percent down payment ($12,000). Federal Housing Administration loans require 3.5 percent down payments, but Fannie Mae and Freddie Mac each have home loan products that require just 3 percent down. However, loans with less than a 20 percent down payment often require mortgage insurance, which raises monthly costs. Have you been looking at homes, but are concerned with affording a home priced at $400,000 or more?
Homes under $300,000 are generally affordable, attractive and well-kept. And depending on the location, you might be able to snag a newly built property in this price range. The average sales price on single-family houses in Fort Wayne, Indiana, is $236,600. Listing prices are up 5.9% from the year prior, though price growth is slowing, according to NAR’s data. Finding the perfect home can be a bit more challenging if your top priorities are maximum square footage and keeping to your budget.
You could be in line from one of these for an outright grant, a low-interest loan, or a zero-interest forgivable loan. Check out some of your options in Down Payment Assistance Programs & Grants by State 2023. Evans tells buyers not to be discouraged if you can’t buy the home of your dreams right away. One piece of advice Evans gives her clients is don’t start off renting a home that is nicer than the one you can afford to buy. Which is why Barry recommends shopping around for the right lender as much as the right mortgage.
For VA loans, there’s no strict minimum, but a credit score of at least 620 is often preferred. USDA loans may not have an official minimum requirement, but a score of 640 or higher is recommended. FHA loans, which require a small down payment, may accept borrowers with scores as low as 580.
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