How Much House Can I Afford? The Honest Math
The 28/36 rule
A common guideline is that your housing payment (principal, interest, taxes, and insurance) should be no more than 28% of your gross monthly income, and your total monthly debt payments (including the mortgage) should be no more than 36%. These ratios give lenders a quick picture of whether a loan is affordable for you.
Don't forget the full payment
Your monthly cost isn't just principal and interest. Property taxes, homeowners insurance, and, if you put less than 20% down, mortgage insurance all add to the bill. HOA dues and maintenance should factor into your own budget too.
Use a mortgage calculator
Plug your target home price, down payment, rate, and term into a mortgage calculator to see the monthly payment. Then compare it to your take-home pay. A good rule of thumb: if the payment leaves you stressed, the house is too expensive.
Get pre-approved to know for sure
Calculators give you a ballpark, but a lender's pre-approval tells you exactly how much you can borrow based on your actual income, credit, and debts. It's the fastest way to know your real number.
Ready to get your real numbers?
Call now to speak with a mortgage professional, or take the quick quiz to get matched.