How many first-time home buyers make $75k? That’s a starting salary for an engineering graduate from a good university.
According to this PennyMac Home-Buying Guide:
If you’re in the market for a home, the first thing you should do is figure out how much you can afford.
Here are two down-and-dirty formulas you can use to get a quick ballpark number:
1) Multiply your annual salary by 2.5. For instance, a family with a household income of $75,000 could afford to purchase a home for up to approximately $187,500. Of course, this figure will vary based on factors that include how much money you can put down and your current debt.
2) Multiply your monthly gross income by 31%. If you make $7,000 a month ($84,000 annual salary),then your total maximum monthly payment would be $2,170*. This includes mortgage principle, interest, taxes, and insurance.