In addition to your monthly mortgage payment, you’ll want to consider several other factors before applying for a $350,000 mortgage. Let’s break them down one-by-one.
Down Payment
Depending on the kind of mortgage loan you sign up for, you may be required to make a down payment on your home. In any case, you’ll have a more manageable monthly mortgage payment the more money you put down upfront.
That’s because your principal mortgage balance starting out will be less than if you put no money or less money down. On a conventional loan, which you can sometimes get with a down payment of as little as 3% of the purchase price, it’s best if you can put down no less than 20%. That way, you can avoid paying private mortgage insurance (PMI) and having extra PMI fees included as part of your monthly mortgage bill. Take into consideration your current savings and how much of that you’re planning to contribute to a down payment.
Closing Costs
Closing costs are another one-time expense you need to plan for when taking out a mortgage. In most cases, you can expect to be required to pay 3% – 6% of the loan amount in closing costs. That comes out to somewhere in the $10,500 – $21,000 range on a $350K mortgage.
Closing costs often include the following fees, although not all home purchase transactions have the same closing costs:
- An application fee
- An attorney’s fee
- A closing fee
- A courier fee
- A credit reporting fee
- A homeowners association transfer fee
- A loan origination fee
- An appraisal fee
- Escrow fees
Loan Term
As we briefly touched on above, you’ll need to decide on a loan term for your mortgage. You can choose between the common 30-year and 15-year term options, or you may be able to go with a far less common 20-year term.
If you have the means to pay more per month, you may be best opting for a 15-year loan, while a 30-year loan is likely the best option if you can’t afford to make higher monthly payments at the time of purchase.
Adjustable-Rate Vs. Fixed-Rate Mortgage
One of the most important decisions you’ll make concerning your loan is whether to go with a fixed-rate or an adjustable-rate mortgage. With the latter option, your interest rate will be set for a period of several years – known as the fixed period – after which it can change every year or so based on fluctuations in market rates.
With a fixed-rate mortgage, your interest rate will never change for as long as you owe money on the home. That said, the amount of your monthly mortgage payment could still go up or down with any changes in the amount you owe in property taxes and homeowners insurance from year to year. Homeowners like fixed-rate mortgages for their predictability relative to adjustable-rate loans, but the big upside of an adjustable-rate mortgage is that you can typically secure a lower interest rate for the first few years.
Knowing the differences between these mortgages is key to understanding your monthly payment on your $350,000 mortgage and how it may change over time.
Qualification Requirements
To be approved for a $350,000 mortgage, you’ll need to meet your lender’s qualification requirements. Typical requirements for a conventional loan include not just a minimum 3% down payment, as mentioned earlier, but also a credit score of at least 620, a maximum debt-to-income ratio (DTI) of 50%, and an income that can support both your monthly mortgage payment and other life expenses and bills.
FAQs
Monthly payments for a $350,000 mortgage
| Annual Percentage Rate (APR) | Monthly payment (15 year) | Monthly payment (30 year) |
|---|
| 6.25% | $3,000.98 | $2,155.01 |
| 6.50% | $3,048.88 | $2,212.24 |
| 6.75% | $3,097.18 | $2,270.09 |
| 7.00% | $3,145.90 | $2,328.56 |
5 more rowsFollowing the 28/36 rule, a guideline many mortgage lenders use to gauge how much you can afford, you'd likely need to earn at least $90,000 per year to afford a $350,000 house without spreading yourself too thin. Keep in mind that figure does not include upfront payments, like your down payment and closing costs.
How much would a $350,000 mortgage cost? ›
Calculating Repayments on a 350k Mortgage
| Mortgage Term | Interest Rate | Monthly Repayment |
|---|
| Over 10 years | 4,32% | £3597 |
| Over 15 years | 4,32% | £2645 |
| Over 20 years | 4,32% | £2180 |
| Over 25 years | 4,32% | £1910 |
The required credit score for a $350K loan will vary by loan type and lender. No matter what, though, you can expect a better interest rate the better your credit score. Most lenders require a minimum credit score of 620 to grant approval for a conventional loan.
How much is a 20% down payment on a $350 000 house? ›
The median downpayment on a home is 13%, but if a buyer wants to avoid fees, including private mortgage insurance, they may have to put at least 20% down. If a buyer puts 20% down and takes out a $350K mortgage, they're likely putting down around $87,500.
How much is 350000 at 7 percent for 30 years? ›
Monthly Payments for a $350,000 Mortgage
With a 30-year loan term and 7% interest rate, borrowers can expect to pay around $2,328 a month.
Can I afford a 300k house on a 70K salary? ›
If you make $70K a year, you can likely afford a new home between $290,000 and $310,000*. That translates to a monthly house payment between $2,000 and $2,500, which includes your monthly mortgage payment, taxes, and home insurance.
How much house can I afford if I make $36,000 a year? ›
On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.
Can I afford a 300k house on a 50K salary? ›
A person who makes $50,000 a year might be able to afford a house worth anywhere from $180,000 to nearly $300,000. That's because your annual salary isn't the only variable that determines your home buying budget. You also have to consider your credit score, current debts, mortgage rates, and many other factors.
What income do you need to buy a $400,000 house? ›
To afford a $400,000 home, assuming a 20% down payment and a 6.5% interest rate on a 30-year mortgage, you would need a gross monthly income of approximately $7,786.55. This assumes you have $1,000 in monthly debt.
With a 5% down payment and an interest rate of 7.158% (the average at the time of writing), you will want to earn at least $6,644 per month – $79,728 per year – to buy a $300,000 house. This is based on an estimated monthly mortgage payment of $2,392.
How much would a $300 000 mortgage cost? ›
Monthly Payment Breakdown by APR and Term
| APR | 15-year term | 30-year term |
|---|
| 4.00% | $2,219 | $1,432 |
| 4.50% | $2,295 | $1,520 |
| 5.00% | $2,372 | $1,610 |
| 5.50% | $2,451 | $1,703 |
4 more rowsAn individual earning $60,000 a year may buy a home worth ranging from $180,000 to over $300,000. That's because your wage isn't the only factor that affects your house purchase budget. Your credit score, existing debts, mortgage rates, and a variety of other considerations must all be taken into account.
What is a good credit score by age? ›
How Credit Scores Breakdown by Generation
| Average FICO 8 Score by Generation |
|---|
| Generation | 2022 | 2023 |
|---|
| Generation Z (ages 18-26) | 679 - Good | 680 - Good |
| Millennials (27-42) | 687 - Good | 690 - Good |
| Generation X (43-58) | 707 - Good | 709 - Good |
2 more rowsMortgage lenders typically want to see a score of 620 or better before approving a conventional mortgage. There are government-insured mortgages if your score is lower, and if your score is 760 or higher you'll qualify for the best interest rates.
How much is a 400K mortgage per month? ›
For example, on a $400K mortgage with a 7% fixed rate, the monthly payment on a 15-year loan is $3,595. The payment on a 30-year loan, by comparison, is $2,661. Just keep in mind that neither amount factors in the cost of insurance or property taxes, which will both be included in your monthly payment.
How much per month is a 300k mortgage? ›
Monthly payments on a $300,000 mortgage
At a 7.00% fixed interest rate, your monthly mortgage payment on a 30-year mortgage might total $1,996 a month, while a 15-year might cost $2,696 a month.
How much house can I afford if I make $70,000 a year? ›
As a rule of thumb, personal finance experts often recommend adhering to the 28/36 rule, which suggests spending no more than 28% of your gross household income on housing. For someone earning $70,000 a year, or about $5,800 a month, this means a housing expense of up to $1,624.
How much is a 500k mortgage per month? ›
A $500,000 mortgage can cost over $2,500 per month, depending on the interest rate and loan term. Factors that affect the monthly cost of a mortgage include the loan amount, interest rate, loan term, and property taxes.
