The median price for single-family homes and condos was $360,000 in the second quarter of 2024. So as expensive as it might sound, $300,000 is squarely in the price range of many first-time homebuyers these days.
If you go by the old rule of thumb and save up a 20% down payment, that means forking over $60,000 up front on a $300,000 home sale. However, most contemporary mortgages allow buyers to put down far less — first-time homebuyers can put down as little as 3%, which comes out to $9,000 on a $300,000 home. That said, there will likely be other upfront expenses to contend with, so saving up even more than that is still a good idea.
Let’s take a closer look at how to prepare for a $300,000 home purchase — including not only your down payment but also the amount of income you need to support your purchase.
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How Much Income Do I Need to Afford a $300K Home?
There’s not one simple answer to this question — because the real question is, “How much income will it take to afford my mortgage payment?” And that question depends on how much your home loan payment turns out to be, whether you have to pay private mortgage insurance (PMI), and more. However, there is some quick napkin math we can do to help get an estimate.
Many financial experts say you shouldn’t be spending more than about 30% of your gross monthly income on housing. To simplify this even further, let’s just say a third of your gross income.
From here, we can do some reverse engineering and estimating to figure out how much income would likely comfortably support a $300,000 home purchase.
Using a mortgage calculator, supposing you purchase a $300,000 home with a $9,000 down payment and a 7.00% interest rate, you can see that your monthly payments would turn out to be about $1,900 a month. (Note: These figures are only estimates, and your real monthly payment will depend on your creditworthiness, your lender’s unique algorithm, and other factors.)
Using that one-third rule above, you’d need to be earning about $5,700 per month ($1,900 times three) before taxes to make your mortgage payments without overextending yourself financially. That comes out to an annual income of about $68,400.
Using a mortgage calculator with taxes and insurance, will get you even closer to your true monthly number. When you factor in taxes and homeowners insurance, your monthly payment would be closer to $2,300. Returning to the one-third rule, you would need an annual income of $82,800.
Of course, if you have large amounts of existing debt, you may need a higher income to comfortably make your payments. Still, this is a good point of reference to start with.
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How Much Is the Down Payment for a $300K House?
As mentioned above, the 20% down payment you’d need to avoid paying PMI is $60,000 for a $300,000 house. But with conventional mortgages that allow qualified first-time homebuyers to put down as little as 3%, your down payment could be just $9,000. (Depending on your credit score and other financial information, you may need to put down 5%, which would come out to $15,000.)
Keep in mind, though, that the down payment isn’t the only upfront expense of homeownership. It doesn’t include closing costs, which could be as much as 3% to 6% of the home purchase price (which means another $9,000 to $18,000, for a $300,000 home). You’ll also need to factor in expenses related to moving, furnishing, repairing, and renovating your new home.
What Are the Down Payment Options for a Home Worth $300K?
Which down payment you’ll qualify for depends on the type of mortgage you take out and your credit history.
• No matter what type of mortgage you choose, if you put down 20%, or $60,000, you’ll avoid paying mortgage insurance (PMI) as part of your monthly payment.
• If you qualify for a conventional mortgage, you may be eligible to put down as little as 3%, or $9,000. (Other borrowers may be qualified for 5%, or $15,000.)
• Those who qualify for an FHA home loan as a first-time homebuyer may put down as little as 3.5%, or $10,500.
• If you’re an active service member, veteran or surviving spouse, you may qualify for a VA loan. In some cases, you may be able to get a VA loan without any down payment at all.
If even a modest down payment feels out of reach, down payment assistance programs can also help.
What Does the Monthly Mortgage Payment Look Like for a $300K Home?
Again, your monthly mortgage payment will vary depending on your down payment, interest rate, the term of the loan (usually 15 or 30 years), and more. In calculating your specific loan options, your lender will take into consideration your personal credit factors as well as your DTI (debt to income) ratio.
Using a mortgage payment calculator can help. A calculator would show that someone who puts down $9,000 on a $300,000 home for a 30-year fixed-interest mortgage at 7.00% would pay approximately $1,936 per month (not including property taxes, MIP, or homeowners insurance). Note that because of the way loans are amortized, the bulk of your monthly payments will go toward interest, rather than principal, during the first part of the loan’s lifetime.
What to Do Before You Apply for a $300K Mortgage
If you want to maximize your chances for approval when applying for a $300,000 mortgage, consider taking some time to get your financial affairs in order. (Sometimes, life circumstances like a new job or a new baby mean you have to buy a home quickly, so you may not have time to make everything as shiny as you’d like.)
What does this mean? Paying down large existing debts, especially high-interest debt like credit card balances, can lower your DTI and win you more favorable mortgage terms (not to mention making it easier to make ends meet as far as other monthly expenses). Finding ways to increase your income can also improve your application — and make your financial life easier.
Should I Get Preapproved Before Applying for a Mortgage?
Getting preapproved is a great way to understand how much mortgage is available to you based on your current financial standing — and to signal to real estate professionals and sellers that you’re serious. Preapproval differs from prequalification in that it usually does require a “hard” credit check, so you should only do it if you’re truly ready to buy a house when the right one comes along — but if you are, it’ll give you the chance to get your foot in the door quickly.
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How to Get a $300K Mortgage
These days, applying for a mortgage is pretty easy and can usually be done in the comfort of your own home. You’ll likely need to upload documentation proving your income and identity to your lender’s online portal — or if you’re more comfortable doing so, you may be able to apply in person and supply documents on paper or via fax.
The Takeaway
The answer to the question “how much is the down payment for a $300K house?” could be as little as $9,000 or as much as $60,000 — or more. In some cases a zero down payment loan is even possible. It all depends on what kind of mortgage you want and qualify for, as well as how much you can reasonably afford to fork over at the closing table.
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.
FAQ
Can I afford a $300K house on a $70K salary?
If you have minimal debts then a $70,000 salary might be enough to afford a $300,000 house. The size of your down payment and your mortgage interest rate will be important variables. Try to keep your monthly house payments below a third of your monthly gross income.
How much do you need to make to afford a $300K house?
There’s not one set answer to this question, because plenty of factors other than income influence your ability to qualify for a mortgage and comfortably make the payments. A good rule of thumb is to ensure you’re paying no more than a third of your gross monthly income toward housing. You would need an annual income of $82,800 to comfortably afford a $300,000 house when you factor in the mortgage payment, homeowners insurance costs, and taxes.
What credit score is needed to buy a $300,000 house?
Each lender has their own qualification schema as far as credit scores and other creditworthiness markers are concerned. That said, generally speaking, a credit score of at least 620 will help you qualify for more types of mortgages and open your options for shopping around.
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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.
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