💰 How Much House Can I Afford?

The 28/36 Rule for Home Affordability

Spend no more than 28% of gross income on housing (mortgage, taxes, insurance) and 36% on total debt including housing. This keeps you financially comfortable.

Calculating Your Housing Budget

Multiply gross monthly income by 0.28 for maximum housing payment. If you earn $6,000/month, housing should be under $1,680/month including all costs.

Factors Lenders Consider

Credit score, debt-to-income ratio, employment history, down payment amount, and savings/reserves all affect how much you can borrow.

Beyond the Mortgage Payment

Property taxes, homeowners insurance, PMI (if applicable), HOA fees, utilities, and maintenance add 30-50% to your base mortgage payment.

Down Payment Impact on Affordability

Larger down payments mean lower monthly payments, no PMI, and better rates. 20% down is ideal, but 3-5% works for many buyers.

Debt-to-Income Ratio Explained

DTI = monthly debt payments / gross income. Lenders prefer under 43%, ideally under 36%. Pay down debt before applying to increase affordability.

Using a Mortgage Affordability Calculator

Input income, debts, down payment, and expected rate to see your price range. Run multiple scenarios to find your comfort zone.

Affordability vs Approval Amount

Just because you're approved for $400K doesn't mean you should spend that much. Consider your lifestyle, savings goals, and financial flexibility.

Hidden Costs of Homeownership

Budget 1-3% of home value annually for maintenance. Factor in closing costs (2-5%), moving expenses, and immediate repairs or upgrades.

Maximizing Your Home Buying Budget

Improve credit score, pay down debt, save for larger down payment, consider fixer-uppers, and explore up-and-coming neighborhoods for better value.