I Make $45,000 a Year, How Much House Can I Afford?

On a salary of $45,000 per year, you can afford a house priced at around $120,000 with a monthly payment of $1,050 for a conventional home loan — that is, if you have no debt and can make a down payment. This number assumes a 6% interest rate.

These numbers change—sometimes dramatically—depending on a few factors, including:

•   How much debt you have

•   What your down payment is

•   How much you’re paying for taxes, insurance, and homeowners association dues, if anything

•   What interest rate is available to you

•   What type of loan you get

With the median home price in the U.S. topping $400,000, you might be wondering how everyone else affords a home in your neighborhood. We’ll cover every aspect of home affordability for a $45,000 salary to help you work toward getting the home you’ve always wanted.


💡 Quick Tip: A VA loan can make home buying simple for qualified borrowers. Because the VA guarantees a portion of the loan, you could skip a down payment. Plus, you could qualify for lower interest rates, enjoy lower closing costs, and even bypass mortgage insurance.†

What Kind of House Can I Afford With $45K a Year?

The kind of home you can afford depends on more than your $45,000 salary. It’s also based on your debt-to-income (DTI) ratio, interest rate, down payment, type of home loan, and lender.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.


Understanding Debt-to-income Ratio

Your DTI ratio is a key factor in determining how much home you can afford. The more debt you have, the lower your housing payment needs to be. This directly translates into a lower priced home. So, what exactly is a DTI ratio? It is the proportion of monthly debt you need to repay in relation to your gross monthly income.

For example, if your total debt amounts are $2,000 each month and your income is $6,000 per month, your debt-to-income ratio would be 33%. This falls under the 36% threshold mortgage lenders look for with conventional home mortgage loans.

However, keep in mind that the $2,000 has to include your new mortgage payment. If your debts cost $500 each month, your monthly mortgage payment cannot be more than $1,500.

How to Factor in Your Down Payment

Your down payment also plays a significant factor in home affordability. Generally, the higher down payment you have, the more home you can afford. If you purchase a home far below what you can afford, your monthly payment will be much lower.

If you make a down payment of 20% or more, you’ll also be able to save on mortgage insurance premiums, which are typically required on most loan types for homes purchased with a down payment lower than 20%.

If you play around with a mortgage calculator, you can see how a larger down payment can affect your monthly payment and home price.

Factors That Affect Home Affordability

Beyond your debt, income, and down payment, there are a number of other factors that go into home affordability. These include:

•   Interest rates The interest rate you have on your home dramatically impacts how much home you can afford. When interest rates are high, your monthly payment is higher. When interest rates are down, you pay less interest on your loan, which means you can afford a more costly home. Remember that if rates drop significantly a mortgage refinance is always an option.

•   Credit history and score The interest rate that you’ll qualify for is dependent on your credit score and history. A better credit score will qualify you for the best interest rates, which means your monthly payment will be lower, which can increase your buying power.

•   Taxes and insurance Taxes and insurance factor into your home’s monthly payment. They will be calculated into the home’s PITI (payment, interest, taxes, insurance) and included as part of your monthly debts.

•   Loan type The type of loan you get affects home affordability. This is due to the different interest rates and down payment options available to specific loan types. VA loans from the U.S. Department of Veterans Affairs, for example, come with a lower interest rate and don’t require a down payment.

•   Lender Lenders may have discretion to increase the allowable debt-to-income ratio. Some can go as high as 50%.

•   Location Some areas are more affordable than others. Thinking about moving? Take a look at a list of the best affordable places to live in the U.S.

Recommended: The Cost of Living By State

How to Afford More House With Down Payment Assistance

One of the best tools for increasing home affordability is with down payment assistance programs. These programs provide funds for the down payment (and sometimes closing costs) to help make homes more affordable for buyers.

Some programs offer down payment assistance in the form of a grant that does not need to be repaid, while others finance a second mortgage which may need to be paid when the home is sold (but sometimes is forgiven earlier). In Colorado, for example, there’s the CHFA Colorado Down Payment Assistance Grant. Virginia offers the Virginia HOMEownership Down Payment and Closing Cost Assistance program (DPA)

Search your state, county, and city to see what programs are offered for your area. You may also want to read tips to qualify for a mortgage.

How to Calculate How Much House You Can Afford

Calculating how much house you can afford is smart, especially if you’re a first-time homebuyer and making early plans to buy a home. There are some guidelines lenders use to qualify borrowers for a mortgage, including:

The 28/36 Rule: This guideline states that no more than 28% of your income should go to your monthly housing payment and your debt-to-income ratio should be no more than 36% of your income

When calculating DTI (also known as the back-end ratio), your lender will add all of your debts (including the new mortgage payment) to make sure all debts will fall under 36% of your income amount. If your monthly income is $3,750 ($45,000/12 = $3,750), your debts (including the mortgage payment) should be no more than $1,350 ($3,750*.36).

Lenders will also calculate the front-end ratio, which should be no more than 28% or your income. With a monthly income of $3,750, this number works out to $1,050.

The 35/45 Rule: Some lenders may go by the 35/45 guideline, which allows for a housing payment up to 35% of income and 45% of total DTI ratio. This expanded allowance is up to the lender, but may allow for qualification of higher purchase amount and payment.

With a monthly income of $3,750, the housing allowance (35% of your income) increases to $1,312.50 and the total monthly debts (45% of your income) increases to $1,687.50. An easier way to calculate how much home you can afford is with a home affordability calculator.

Home Affordability Examples

Let’s take a look at two examples of homebuyers with $45,000 incomes in differing scenarios. All assume the same taxes ($2,500), insurance ($1,000), and APR (6%) for a 30-year loan term (just for illustrative purposes).

The $45,000 annual salary is divided by 12 to get a $3,750 monthly income and the maximum DTI ratio works out to be $1,350 ($3,750 * .36).

Example #1: $45,000 income but lots of debt
Monthly credit card debt: $300
Monthly car payment: $350
Student loan payment: $300
Total debt = $950 total debt payments

Down payment = $20,000
Maximum DTI ratio = $3,750 * .36 = $1,350
Maximum mortgage payment = $400 ($1,350 – $950)

Home budget = $38,069

Even with a $20,000 down payment, it could be hard to buy a home in this scenario.

Example #2: $45,000 income with little debt
Monthly credit card debt: $50
Monthly car payment: $0
Student loan payment: $0
Total debt = $50

Down payment: $20,000
Maximum DTI ratio = $3,750 * .36 = $1,350
Maximum mortgage payment = $1,300 ($1,350 – $50)

Home budget = $171,925



💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as low as 3.5%.1

How Your Monthly Payment Affects Your Price Range

The monthly payment you qualify for affects the total price you can pay for a home. If monthly debts are too high, for example, you’ll likely qualify for a lower-priced home. The monthly payment is also affected by interest rates. Because interest is amortized over 30 years (on a 30-year mortgage), the amount of interest you pay is significant, even if you manage to score a lower rate.

Recommended: Home Loan Help Center

Types of Home Loans Available to $45K Households

When you’re looking for home loans, you’ll see these different types of mortgage loans available:

•   FHA loans Loans backed by the Federal Housing Administration are geared toward buyers with low down payments, low credit scores, and other situations that require a lender to be more flexible.

•   USDA loans United States Department of Agriculture loans are for those who live in rural areas. They offer zero down payment options and low interest rates.

•   Conventional loans Conventional loans are loans that are not part of a government program, but they are backed by government-sponsored enterprises, Fannie Mae and Freddie Mac. They’re usually less expensive than FHA loans, but your application does need to meet certain guidelines to qualify for conventional financing.

•   VA loans VA loans offer zero down payment options, the lowest interest rates on the market, and flexible credit requirements. If you qualify for a VA loan, you’ll likely want to go with this option.

The Takeaway

There’s no way around it — affording a home in today’s housing market is tough. If your $45,000 salary is all you have access to, you’ll need to save, improve your credit, research down payment assistance programs, enlist a partner, move to a less expensive area, or find other creative ways to afford a home. But don’t give up. It can be done. Your hard work will pay off with a mortgage for a home of your own soon.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is $45K a good salary for a single person?

A $45,000 salary for a single person is a good start. How good it feels to earn $45,000 will depend on the cost of living where you live and the friends and neighbors you’re surrounded by.

What is a comfortable income for a single person?

A comfortable income for a single person depends on your lifestyle and habits. The median income for a single person is $56,929, according to data from the U.S. Census. A single person in Cobb County, Georgia, would be able to cover their expenses for about $40,000 per year while the same person in New York City would need $53,342.

What is a liveable wage in 2023?

The Massachusetts Institute of Technology’s Living Wage Calculator takes into account your area, working household members, and number of children. For example, a single living in San Francisco has a living wage of $26.63. A household with three children where only one spouse works in St. George, Utah has a living wage of $44.99 per hour.

What salary is considered rich for a single person?

To be in the top 5% of earners, you would need a salary north of $234,342.


Photo credit: iStock/500

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.



*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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How Much House Can I Afford Making $150,000 a Year?

With a $150,000 salary, you could afford a home priced around $415,000-$430,000, assuming you have $20,000 saved up for a down payment and are carrying some monthly debt already, such as a car payment or student loan. This also assumes an interest rate of 7%.

As you can see, your homebuying budget depends on more than just your salary, including your personal financial situation, the mortgage rate you qualify for, and the loan type. Here’s a closer look at the key considerations that impact home affordability, plus guidance on calculating how much house you can afford.

What Kind of House Can I Afford With $150K a Year?

You may have heard the age-old adage: location, location, location. The type of house you can afford on a $150,000 salary will depend on where you’re looking to buy. Besides differences in cost of living by state, prices can also vary at the neighborhood level.

Your personal finances — not just income — matter, too. Lenders will assess your credit score, debt, assets, and ability to make a down payment to determine what kind of home mortgage loan you qualify for, which helps determine your homebuying budget.

Recommended: Best Affordable Places to Live in the U.S.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.


Understanding Debt-to-Income Ratio

Your debt-to-income (DTI) ratio represents the percentage of your gross income that goes toward debt payments. It’s calculated by dividing all your monthly debts — such as student loans and credit card debt — by your gross monthly income.

Lenders consider a borrower’s DTI ratio to determine whether they qualify for a home loan and at what interest rate. A DTI ratio of 36% or less is recommended for homeowners, though the maximum DTI ratio varies from lender to lender and between mortgage types.

If earning $150,000 a year, your gross monthly income is $12,500. To have a DTI ratio of 36% or less, your total debts, including the mortgage, would need to be at or below $4,500.

Some lenders may assess both your front-end and back-end DTI ratios, using what is known as the 28/36 rule. In this scenario, lenders usually look for housing costs to top out at 28%. This comes out to $3,500 in monthly housing costs on a $150,000 salary.

Meanwhile, back-end DTI covers all recurring debt payments. Lenders typically prefer a back-end ratio of 36% or less.



💡 Quick Tip: Not to be confused with prequalification, preapproval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for preapproval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.

How to Factor in Your Down Payment

The required down payment amount depends on the type of home loan. But how much you can put toward a down payment impacts how much house you can afford. The more you can put down upfront, the less you’ll need to borrow, which means lower monthly payments and less interest paid over time. Having a larger amount saved for a down payment could also increase your housebuying budget.

That being said, a down payment shouldn’t wipe out your savings. It’s important to account for home repairs and ongoing housing costs when deciding how much money to put down.

Recommended: Do You Still Need to Put a 20% Down Payment on a House?

Factors That Affect Home Affordability

There are several factors that affect home affordability in addition to DTI ratio and down payment. Lenders will consider a borrower’s credit score to determine their ability to repay a mortgage loan. The higher your credit score, the better your chance of qualifying for a lower interest rate and favorable loan terms.

How you plan to finance your home matters, too. The minimum credit score, down payment requirement, and DTI ratio all vary by home loan type.

Besides your personal finances, prevailing mortgage rates have a major effect on home affordability. Higher interest rates increase monthly payments and the overall cost of borrowing. The National Association of Realtors® estimates that mortgage interest rates will average 6.3% in 2024. This represents a significant rate drop from 2023 when interest rates exceeded 7% for the majority of the year.

Home Affordability Examples

Here’s a look at a couple home affordability examples that show how the amount of debt you carry could affect your home affordability budget.

As noted above, according to the 28/36 rule, you can afford a maximum monthly mortgage payment of up to $3,500 and total monthly debt payments of up to $4,500 if earning $150,000 a year.

A borrower with $1,000 in monthly debt and $50,000 saved toward a down payment could afford a $500,000 house, or a monthly payment of $3,391, assuming a 5% interest rate and average property taxes and insurance costs.

Meanwhile, a borrower with $2,000 in debt could only afford a monthly mortgage payment of $2,500. In this scenario, a borrower could afford a house of nearly $400,000 with a $50,000 down payment and holding other variables constant.

How to Afford More House With Down Payment Assistance

According to the National Association of Realtors®, the average down payment in 2023 was 8% for first-time homebuyers and 19% for repeat buyers. This can translate to a hefty sum, especially in more expensive housing markets. If you’re facing challenges coming up with a down payment, you’re not alone. Buyers can consider down payment assistance programs to help get a mortgage.

Down payment assistance programs are offered by the federal government, state and local government, and nonprofit organizations. Assistance is available in the form of grants, low-interest loans, or forgivable loans to help buyers make a down payment.

This assistance typically comes with eligibility requirements for the homebuyer and property. For example, applicants may need to meet household income limits or be a first-time homebuyer to qualify. Assistance programs are usually intended for primary residences, and buyers can be required to live in the home for a minimum timeframe.

Recommended: Tips to Qualify for a Mortgage

How to Calculate How Much House You Can Afford

Still wondering, “I make $150,000 a year, how much house can I afford?” You’ll need your total monthly debt, estimated down payment, and interest rate to calculate how much house you can afford.

Rather than crunching the numbers yourself with the 28/36 rule, use a home affordability calculator or mortgage calculator to easily experiment with different scenarios. Prospective homebuyers can also get preapproved for a home loan to get an idea of how much they can afford. Getting preapproved also shows sellers that you’re a serious buyer and provides some assurance that your financing won’t fall through.

How Your Monthly Payment Affects Your Price Range

Lenders consider your ability to afford monthly mortgage payments when determining how much you qualify to borrow. Mortgage payments consist of four components: principal, interest, taxes, and insurance.

The principal refers to the loan balance, while the interest is the amount (expressed as a percentage) that’s charged on the principal by the lender for issuing the loan. Real estate and property taxes can be lumped into monthly mortgage payments. These costs vary considerably by the property’s location and assessed value, ultimately impacting your home price range.

Home insurance that protects the property from fire, theft, floods, or other disasters is sometimes included in a monthly payment. And if you put less than 20% down on a house, you’ll have to pay private mortgage insurance (PMI), which increases your monthly payment. However, it’s possible to get out of PMI down the line when you hit 20% equity or with a mortgage refinance.



💡 Quick Tip: Lowering your monthly payments with a mortgage refinance from SoFi can help you find money to pay down other debt, build your rainy-day fund, or put more into your 401(k).

Types of Home Loans Available to $150K Households

Households making $150,000 a year have multiple financing options. Qualifying for different types of mortgage loans depends on credit score, down payment, and other borrower characteristics. Here are some common home loan options for $150,000 households to consider:

•   Conventional loans: The most common type of mortgage, conventional home loans usually require a 620 credit score and may offer down payments as low as 3%.

•   FHA loans: This loan backed by the Federal Housing Administration offers competitive interest rates and a down payment of 3.5% for qualified first-time buyers with a credit score of at least 580.

•   United States Department of Agriculture loans: There’s typically no down payment or credit requirements, but borrowers must meet income eligibility and a property must be in a USDA-designated rural area.

•   VA loans: Active-duty service members, veterans, reservists, and surviving spouses can get a low-interest loan from the U.S. Department of Veterans Affairs with no down payment requirement.

Check out a home loan help center to dive deeper into mortgage basics and the homebuying process.

The Takeaway

If you make $150,000, how much house you can afford depends on several factors, including your DTI ratio, credit score, loan type, savings for a down payment, and location. After figuring out your personal homebuying budget, it’s time to start shopping for a home loan.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is $150K a good salary for a single person?

A $150,000 salary is more than double the national average wage in 2022 of $63,795. Therefore, a single person making a $150,000 salary can likely afford a more expensive home than most.

What is a comfortable income for a single person?

Generally speaking, a comfortable income for a single person should exceed the cost of living in your area. For example, the annual cost of living in California is $53,082 versus just $39,657 in Alabama.

What is a liveable wage in 2024?

Americans in most states need to earn between $15 and $20 an hour for a liveable wage in 2024. However, a liveable wage in urban areas of states such as California, New Jersey, New York, and Virginia is considerably higher.

What salary is considered rich for a single person?

When surveyed, Americans report needing to earn about $483,000 to feel rich. In reality, though, a salary of $234,342 would put you in the top 5% of workers.


Photo credit: iStock/zamrznutitonovi

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.



*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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I Make $90,000 a Year, How Much House Can I Afford?

Earning $90,000 a year puts you in a good position to afford a home priced at around $350,000, as long as you don’t already have significant other debts to pay. That’s good news considering the U.S. average home value these days is just above $342,000. But there are many variables in play that could adjust your budget up or down. Let’s examine them to get closer to your personal housing budget number.

What Kind of House Can I Afford With $90K a Year?

Congratulations! At $90,000 a year, your salary is almost $15,000 higher than the American median household income. It makes sense that you’ve set your sights on homeownership. Making $90,000 per year may feel like a lot of money … or not so much, depending on whether you live in an affordable place. The question is less about how much house you can afford than how much you can afford to spend on housing each month.

There’s a basic rule of thumb that you should spend no more than a third of your gross income (i.e., income before taxes) on housing. (Ideally, you’d spend closer to about a quarter.) So someone earning $90,000 per year, can reasonably afford to spend between $22,500 and $29,700 on housing each year — which translates to between $1,875 and $2,475 per month.

That’s a substantial enough chunk of change to cover many mortgage payments. For example, if you took out a home mortgage loan of $310,000 at an interest rate of 7%, your monthly payment might be around $2,060, which falls into your affordable range. (This assumes you make a down payment of $40,000 on a home priced at $350,000.)

However, more factors than your income affect what size loan mortgage lenders will qualify you for — and more factors than the price of the house itself affect whether or not you can afford it.


💡 Quick Tip: You deserve a more zen mortgage loan. When you buy a home, SoFi offers a guarantee that your loan will close on time. Backed by a $5,000 credit.‡

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.


What is Debt-to-Income Ratio (DTI) — and Why Does It Matter?

Let’s take a second to talk about DTI, or debt-to-income ratio. Your DTI is, as its name suggests, a ratio of how much debt you currently have to how much income you make. It’s calculated by dividing your debts by your gross monthly income, and it’s one of the factors lenders consider when qualifying you for a home loan.

If you’re in a lot of debt — meaning your DTI is higher — it may be harder for you to qualify for a mortgage, no matter how much money you make. Inversely, if your DTI is lower, that’s a favorable mark even if you’re not making huge amounts of money.

Consider how much debt you currently carry before applying for a home loan. If you’re already paying off a car, student loan, credit card balance or all of the above, you may want to work on dialing down your debt; even if you qualify for a mortgage, your interest rate might be higher as a result.

Factoring in Your Down Payment

Along with your DTI and income, mortgage lenders also consider how much money you’re able to pay toward a home up front — otherwise known as your down payment. Although a larger down payment might not significantly shift your monthly payment, it can have an effect on the amount a lender is willing to offer you. (Having a significant amount of money available for a down payment can be a favorable marker for lenders.)

That said, it can take a long time to save up a substantial down payment, even for those earning good income — and you may be sacrificing the opportunity to build equity in the short term if you wait to buy a house.

In any case, remember that responsible homeownership will require a well-set savings habit. (After all, your new home is going to need repairs—and you won’t be able to just call your landlord anymore!)

How to Afford More House With Down Payment Assistance

For many would-be homebuyers — especially first-time homebuyers — the process of saving a downpayment is the single largest obstacle to owning a home. Fortunately, down payment assistance programs offer one way for buyers to give themselves a leg up. Offered through government agencies and nonprofits, down payment assistance programs offer very-low-cost loans or grants that can amplify whatever you’ve already saved up for a down payment.

There are often requirements in order to qualify, such as not out-earning a certain income threshold or having less than a given amount of liquid assets available. Still, these programs can bridge the gap for many first-time buyers trying to leap the down-payment hurdle into homeownership.

Other Factors That Affect Your Ability to Afford a Home

Along with your DTI, the size of your down payment, and the size of the loan you’re hoping to take out, your credit score — and credit history in general — has an impact on your housing budget. Even if you earn good money, a poor credit score may keep you from qualifying for a mortgage, and a score that is fair but not great may push your interest rate higher than it would otherwise be.

Additionally, lenders are interested not only in how much you make, but the stability of your capacity to earn that money. That means they’ll consider not only your job, but how long you’ve had it; most like to see a steady job history of two years. That said, it may still be possible to qualify for a home loan if your job is new to you if you’ve had consistent income over that time, especially if your other markers are favorable.

How to Calculate How Much House You Can Afford

To get the best sense of how much you can afford, consider trying an online mortgage calculator, or home affordability calculator, which will allow you to plug in all of your specific metrics and see how much of a mortgage you’re likely to qualify for (and the size of the associated monthly payment). Keep in mind that your mortgage is just the start. When you buy a house, you’ll also be responsible for any maintenance and upkeep, not to mention property taxes, utility costs, furnishings, and more.

Speaking to a lender is another great way to understand in depth how much house you’re likely to be able to afford based on their algorithm and your specific financial standing.


💡 Quick Tip: A VA loan can make home buying simple for qualified borrowers. Because the VA guarantees a portion of the loan, you could skip a down payment. Plus, you could qualify for lower interest rates, enjoy lower closing costs, and even bypass mortgage insurance.†

Home Affordability Examples

Let’s say you earn $90,000 per year and are interested in buying a house that costs $400,000. You’ve saved up $30,000 for a down payment (7.5% of the purchase price of this home), and you have a credit score of 750.

With interest rates around 7%, as they’ve been lately, your monthly payment for such a home would likely be at or above $3,200—in part because, if your down payment is less than 20%, you’ll need to pay for mortgage insurance, which is an additional monthly cost. That’s substantially more than a third of your gross income at $90,000, so it’s probably not a good idea.

So let’s say you take your $30,000 down payment and look at a significantly cheaper home, perhaps in a significantly cheaper state. This one costs $250,000. In that case, with everything else the same, you’d likely pay less than $2,000 per month, which is a comfortable amount for your income level.

Remember that if your credit score and income trend upward after you purchase a home, and you want to improve your mortgage loan terms, you can always look into a mortgage refinance.

How Your Monthly Payment Affects Your Price Range

As you can see, your monthly payment has a huge effect on the price range of the home you’re comfortably able to afford. Although $90,000 per year may seem like a lot of income (and is, at a national level), it may not translate to being able to afford a very large or costly home.

Types of Home Loans Available to Households with $90,000 in Income

Good news: There are many different types of mortgage loans available to those who earn $90,000. Along with conventional loans from private lenders, you may also be eligible for government-subsidized loans like VA loans, FHA loans, or USDA loans, all of which can lower the qualifying requirements and make the home loan process easier for first-time homebuyers.

The Takeaway

Although $90,000 is a large income, especially for a single person, it doesn’t translate to an unlimited home-buying budget. Aside from income, your credit history, DTI, and available down payment amount also have a significant impact on how much mortgage lenders will be willing to offer you.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.


SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is $90K a good salary for a single person?

A salary of $90,000 is substantially higher than the national median household income, so yes, it’s a good salary for a single person. Exactly how good depends on where you live, as the cost of living varies significantly across the U.S.

What is a comfortable income for a single person?

“Comfortable” is relative! While one person may be comfortable sharing a home with multiple roommates, others might require more space or greater luxuries to feel satisfied. Personal finance is just that—personal—and only you can decide how much income you need to be truly comfortable.

What is a liveable wage in 2024?

The living wage changes substantially based on the cost of living where you live. For example, according to the MIT Living Wage Calculator, $14.54 per hour is a living wage for a single adult with no children in Pocatello, Idaho, but that figure goes up to $21.58 in Portland, Oregon.

What salary is considered rich for a single person?

While “rich” is relative, the top 5% of people in America earned more than $335,000 in 2021 according to a study by the Economic Policy Institute. However, depending on where you live, $90,000 may feel rich — or not. Cost of living has a major impact.


Photo credit: iStock/andreswd

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.



*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will give you a credit toward closing costs or additional expenses caused by the delay in closing of up to $10,000.^ The following terms and conditions apply. This Guarantee is available only for loan applications submitted after 04/01/2024. Please discuss terms of this Guarantee with your loan officer. The mortgage must be a purchase transaction that is approved and funded by SoFi. This Guarantee does not apply to loans to purchase bank-owned properties or short-sale transactions. To qualify for the Guarantee, you must: (1) Sign up for access to SoFi’s online portal and upload all requested documents, (2) Submit documents requested by SoFi within 5 business days of the initial request and all additional doc requests within 2 business days (3) Submit an executed purchase contract on an eligible property with the closing date at least 25 calendar days from the receipt of executed Intent to Proceed and receipt of credit card deposit for an appraisal (30 days for VA loans; 40 days for Jumbo loans), (4) Lock your loan rate and satisfy all loan requirements and conditions at least 5 business days prior to your closing date as confirmed with your loan officer, and (5) Pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. This Guarantee will not be paid if any delays to closing are attributable to: a) the borrower(s), a third party, the seller or any other factors outside of SoFi control; b) if the information provided by the borrower(s) on the loan application could not be verified or was inaccurate or insufficient; c) attempting to fulfill federal/state regulatory requirements and/or agency guidelines; d) or the closing date is missed due to acts of God outside the control of SoFi. SoFi may change or terminate this offer at any time without notice to you. *To redeem the Guarantee if conditions met, see documentation provided by loan officer.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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I Make $70,000 a Year, How Much House Can I Afford?

One rule of thumb is that the cost of your home should not exceed three times your income. On a salary of $70k, that would be $210,000. This is only one way to estimate your budget, however, and it assumes that you don’t have a lot of other debts. The truth is that how much house you can afford depends on many factors, so let’s take a look at them.

If I Make $70,000 a Year, How Much House Can I Afford?

“How much house can I afford if I make $70,000 a year” is a question with no single right answer. A second popular guideline for knowing how much house your budget can bear is the 28/36 rule, which stipulates spending no more than 28 percent of your salary on overall housing costs, and no more than 36 percent on all of your debts, including housing costs.

If you follow the 28/36 rule, your housing costs should be less than $1,633 a month, and your debt and housing costs should not exceed $2,100 a month. But how much house that will buy depends on where you live and your existing debt level.


💡 Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.


Your Debt-to-Income Ratio

Lenders look at various things when they qualify you for a loan, but your debt-to-income (DTI) ratio is definitely one of them. This ratio is the amount of income you have relative to the amount of payments you make each month to cover your debt.

A higher ratio means you are using more of your income to cover existing debt, which means, from the lender’s point of view, you will have less cash to pay for your home loan each month. Therefore, a lower debt-to-income ratio, under 36 percent ideally, is better and will likely give you better mortgage terms from a lender.

Your Down Payment

Conventional lenders require a down payment on a home. The amount depends on lender requirements and the borrower’s financial situation. According to the National Association of Realtors®, the average first-time buyer pays about 8% while repeat buyers put down 19%.

The higher your down payment, the lower your monthly housing costs. The interest rate will also affect your monthly costs. You can use a mortgage calculator to see how different down payments affect your loan.

Home Affordability

Depending on the location, homes can be more affordable or less affordable. As noted above, the local housing market, the cost of living, your income, and current interest are all factors affecting home affordability. Remember that if your interest rate feels high, you can consider a mortgage refinance if rates drop and you plan to stay in the home long-term.

House Prices

House prices vary. You might be selling a house where the prices are low and wanting to buy a home where prices are high. If that’s the case, you might have to settle for a much smaller home.

Cost of Living

The cost of living varies depending on where you live. In areas where the cost of living is cheaper – the southern states tend to have lower property taxes and a lower cost of living – you will spend less on necessities and have more money to put towards your monthly home expenses. If you are moving from New York to South Carolina, your household expenses will be much lower in South Carolina, so you might be able to afford a more costly house.

Property Taxes

Your property taxes are based on the assessed value of a property. They vary widely and significantly increase the costs of homeownership in areas where they are high.

How to Afford More House With Down Payment Assistance

The hardest part of buying a home is, arguably, coming up with the down payment. Some state and local governments offer down payment assistance programs to help with the down payment and closing costs for qualified borrowers. Usually for first-time homebuyers, these programs are often low-interest loans or grants, or they might help with closing costs.

If you have a $200,000 home mortgage loan, the closing cost could be around 5 percent, or $4,000. A down payment assistance program might help with those costs, allowing you to use more of your savings for the down payment. You can apply for assistance using a formal application to your state or local government.

Home Affordability Examples

Below are some hypothetical examples for buyers who make $70,000 a year with different savings for a down payment and with various levels of debt. The interest rates are assumed to be 7%, and property tax rates are assumed to be average (1.12%). A buyer in these scenarios would need an additional $4,000 to $6,000 on hand for closing costs.

Example #1: Saver with a Down Payment

Gross annual income: $70,000

Down payment: $21,000

Monthly debt: $250

Home budget: $210,000
Monthly mortgage payment: $1,667

Total Monthly Payments $1,667

•   Principal and Interest: $1,257

•   Property Taxes: $197

•   Private Mortgage Insurance: $158

•   Homeowners Insurance: $55

Example #2: Saver with A Down Payment … and Debt

Gross annual income: $70,000

Savings for down payment and closing: $12,000

Monthly debt: $500

Home budget: $120,000

Total Monthly Payments $953

•   Principal and Interest: $719

•   Property Taxes: $113

•   Private Mortgage Insurance: $90

•   Homeowners Insurance: $31

Using a home affordability calculator, you can plug in different amounts for down payments to get a sense of what you can afford.

How to Calculate How Much House You Can Afford

Rather than relying on a rule of thumb, first keep a budget to track your monthly expenditures, not including any rent. Your expenses should include credit card debt, student loans, other mortgages, etc. Next, decide how much you can put down as a down payment.

Plug your gross annual salary and other numbers into an affordability calculator along with the average interest rate and the property taxes in the area that you want to live. This should give you a general idea of how much home you can afford.

How Your Monthly Payment Affects Your Price Range

Your monthly payment is made up of principal and interest. The interest is determined by the lender, and the higher the rate, the higher your monthly payment. If your down payment is large and you get a good interest rate because you have good credit, you might be able to afford a more expensive house. But you still have to save the down payment.

Types of Home Loans Available to $70K Households

Conventional, FHA, USDA, and VA are the most common home loan options available:

•   Conventional These loans are the most common. They typically require a credit score of at least 620. Some lenders will require a down payment as low as 3 percent, but that will mean your monthly payments will be higher because you will borrow more.

•   FHA Federal Housing Administration loans are a good option if you have a credit score between 500 and 579. These loans require a 10 percent down payment, but if you have a score of 580 or higher, 3.5 percent is accepted.

•   USDA United States Department of Agriculture loans serve low-income borrowers in designated rural areas and require no down payment.

•   VA U.S. Department of Veterans Affairs loans offer a no-down-payment option.



💡 Quick Tip: Active duty service members who have served for at least 90 consecutive days are eligible for a VA loan. But so are many veterans, surviving spouses, and National Guard and Reserves members. It’s worth exploring with an online VA loan application because the low interest rates and other advantages of this loan can’t be beat.†

The Takeaway

Your salary is just one factor determining how much house you can afford. You also have to consider your monthly expenses, how much debt you have, the property taxes in the area where you want to live, current interest rates, and how much you can afford as a down payment. The good news is that if you earn $70,000, most estimates show that you can afford to spend around $2,100 a month on housing expenses so a home should be within reach.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is $70K a good salary for a single person?

A salary of $70,000 is significantly higher than the national median income for a single person in 2022, which was $51,930 for men and $40,200 for women, according to Census data. It’s a good salary, but it does make buying a home harder when the interest rates are high, particularly if you want to live in an area with a high cost of living.

What is a comfortable income for a single person?

A comfortable income for a single person is one that provides a good standard of living where the person lives. The cost of living can vary significantly between and within states. The Massachusetts Institute of Technology Living Wage Calculator is a good place to look at what equates to a livable wage in your specific county.

What is a liveable wage in 2023?

According to the Massachusetts Institute of Technology, the living wage in the United States was $104,07 per year before taxes per year in 2022 for a family of four (two working adults with two children).

What salary is considered rich for a single person?

According to Internal Revenue Service data, an income of $540,009 per year puts a person in the top 1% earnings category.


Photo credit: iStock/svetikd

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.



*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

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What Is the Funding Fee for a VA Home Loan?

A home loan backed by the U.S. Department of Veterans Affairs (VA) can be a great way for eligible service members and their beneficiaries to take out an affordable mortgage — but even though they don’t require a down payment, they’re not free. The VA loan funding fee is a one-time charge associated with taking out a VA home loan. The amount you’ll pay depends on what type of loan you’re taking out, how much you are borrowing, whether or not it’s your first time taking out such a loan, and the size of your down payment.

However, there are some circumstances in which you may not have to pay the VA funding fee — or in which you might be eligible for a funding fee refund. Read on to learn everything you need to know about how the VA home loan funding fee works, and how much you might expect to pay if you’re planning to get one.

What Is a VA Funding Fee?


As discussed above, the VA funding fee is a one-time fee an eligible service member, veteran, or survivor must usually pay in order to take out a VA home loan. This is separate from any down payment the borrower might make, homeowners insurance, or any other cost associated with home-buying: the funding fee’s purpose, per the VA itself, is to help “lower the cost of the loan for U.S. taxpayers.”

Whether you’re buying, building, renovating, or repairing a home, or even refinancing an existing mortgage, if you take out a VA loan, you’ll need to pay the funding fee unless you meet an exemption requirement, which we’ll talk about in more detail below. Of course you’ll also need to meet any other VA loan requirements, much the way you would if you were qualifying for a conventional home loan.


💡 Quick Tip: Apply for a VA loan and borrow up to $1.5 million with a fixed- or adjustable-rate mortgage. The flexibility extends to the down payment, too — qualified VA homebuyers don’t even need one!†

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.


How Does the VA Funding Fee Differ From Mortgage Insurance?


Mortgage insurance, also known as private mortgage insurance or PMI, is usually required on conventional mortgages when the borrower makes a down payment less than 20%. In most cases, when you take out a VA loan, you’re not required to make a down payment at all, nor to pay mortgage insurance. The VA funding fee is a totally separate cost.

Even though it might sound like a downer at first, paying the VA funding fee rather than PMI is really good news for borrowers: Although the VA funding fee is calculated as a percentage of your overall home loan, just like mortgage insurance, it’s far less expensive than having to pay mortgage insurance over time. That’s because the funding fee is assessed just once, while mortgage insurance is paid every month as part of your mortgage payment until you’ve paid off more than 20% of the home loan. That means PMI has the ability to stack up to very high amounts over time.

Recommended: The Different Types of Home Mortgage Loans

Why Is the VA Loan Funding Fee Assessed?


As discussed above, the VA loan funding fee is meant to help lower the cost of VA loans to American taxpayers, since these loans don’t require the borrower to make a down payment or pay mortgage insurance. It’s a relatively small, one-time cost that makes the whole program more affordable for everybody in the long run — what some might call a win-win situation.

How Much Is the VA Funding Fee?


The amount of the VA funding fee varies depending on whether or not this is your first time using a VA loan and how large of a down payment you’re planning to make. (Which type of loan to get is one of many things you’ll have to consider if you’re a first-time homebuyer.) The higher a down payment you make, the lower your VA funding fee will be — and the fees are always lowest the first time you take out a VA loan.These fees can be adjusted over time, and they actually went down in 2023. Today, they range from 1.25% to 3.3%.


💡 Quick Tip: Active duty service members who have served for at least 90 consecutive days are eligible for a VA loan. But so are many veterans, surviving spouses, and National Guard and Reserves members. It’s worth exploring with an online VA loan application because the low interest rates and other advantages of this loan can’t be beat.†

2023 VA Funding Fees for Purchase and New Construction Loans


Here are the rates active-duty military members, veterans, and their survivors can expect when taking out a VA loan. If you used a VA loan in the past to pay for a manufactured home, you’re considered a first-timer for the purposes of this fee. And if your loan from the VA is a Native American Direct Loan, you pay a flat 1.25% regardless of whether this is your first VA loan or how much your down payment is.

Down Payment Amount

VA Funding Fee

First VA Loan

Less than 5% 2.15%
5% to 9.99% 1.5%
10% or higher 1.25%
Subsequent VA Loans

Less than 5% 3.3%
5% to 9.99% 1.5%
5% to 9.99% 1.5%

How Is the Fee Paid?


The VA funding fee is due when your loan closes. You can either pay it all at once as a lump sum then, or incorporate it into your financing and pay it off over time. Of course, if you choose to finance your funding fee, you will likely accrue interest on it, making it more expensive in the long run.

Are There Any VA Funding Fee Exemptions?


Yes! If you fall into one of the following circumstances, you won’t have to pay a VA funding fee:

•   You’re receiving VA compensation for a disability connected to your service.

•   You’re eligible to receive VA compensation for a disability connected to your service, but you’re being paid for active duty or receiving retirement compensation instead.

•   You’re the surviving spouse of a veteran and you receive Dependency and Indemnity Compensation (DIC).

•   You’ve received, before the date your loan closes, a proposed or memorandum rating that says you’re eligible for compensation because of a pre-discharge claim.

•   You’re an active duty service member who provides evidence before or on your closing date of having received the Purple Heart.

Is Anyone Eligible for a VA Funding Fee Refund?


In addition to the above circumstances, if you’re later deemed eligible for VA compensation due to a disability connected to your service, you may be entitled for a refund of your VA funding fee. To confirm, you’d need to call your VA regional loan center at (877) 827-3702 (TTY: 711). They’re available Monday through Friday, 8:00 a.m. to 6:00 p.m. ET.

Recommended: The Cost of Living by State

What Do You Need to Provide to Get a VA Funding Fee Refund?


While the VA regional loan center will walk you through your funding fee refund claim, be aware that you’ll need to provide some documentation to prove your eligibility for a refund. That includes:

•   A copy of your disability award letter — the office may also be able to verify your compensation in your system if you’ve lost the letter

•   A copy of the signed closing documents

•   A copy of your current mortgage statement

Some or all of your VA funding fee may be refunded depending on the eligibility of your claim.

The Takeaway


The VA funding fee is a one-time fee that borrowers must pay to take out a VA loan. It’s due at closing, and the amount varies depending on how much you borrow, the size of your down payment and other factors. First-time VA borrowers always enjoy lower fees than those who take out subsequent VA loans.

SoFi offers VA loans with competitive interest rates, no private mortgage insurance, and down payments as low as 0%. Eligible service members, veterans, and survivors may use the benefit multiple times.

Our Mortgage Loan Officers are ready to guide you through the process step by step.

FAQ

What is the typical funding fee for a VA loan?


For a first-time borrower who doesn’t make a down payment as part of their home purchase, the VA loan funding fee in 2023 is 2.15% of the loan amount. So if you borrowed $200,000 in this scenario, the fee would be $4,300.

What is the new VA funding fee for 2023?


Fees now range from 1.25% to 3.3% of the loan amount, depending on your circumstances. The VA home loan funding fee percentage was reduced as of April 7, 2023 by 0.15% in most categories — and 0.3% for those taking out a VA loan that is not their first and who put down less than 5%.

How to avoid VA funding fee


Unless you are eligible for an exemption due to a service-connected disability (or in a few other instances), it’s impossible to avoid the VA funding fee entirely if you’re taking out a VA loan. That said, your funding fee will be lower if you put down a higher down payment. It’s also lower for first-time borrowers than those taking out subsequent VA loans.


Photo credit: iStock/kupicoo

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.


Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

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