How Much Home Can You Afford?
Understanding your budget is the first step to homeownership. Let us help you figure out what you can comfortably afford.
Affordability Calculator
Enter your income, debts, and down payment to see how much home you can afford and what your monthly payment would be.
Use CalculatorWhat Determines Affordability?
Several factors work together to determine how much home you can afford
Income
Your gross monthly income is a primary factor. Lenders typically want your housing payment to be 28% or less of your income.
Debt-to-Income Ratio
Your total monthly debts (including the new mortgage) should typically be 43% or less of your income.
Down Payment
A larger down payment means a smaller loan and lower monthly payments. It can also help you avoid PMI.
Credit Score
Higher credit scores qualify for better rates, which means you can afford more home for the same payment.
The 28/36 Rule
Housing Ratio
Your monthly housing payment (including principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income.
Total Debt Ratio
Your total monthly debt payments (including housing, car loans, student loans, credit cards) should not exceed 36% of your gross income.
Note: Some loan programs allow higher ratios. Contact us to learn more.
Tips to Increase Your Buying Power
- Pay down existing debt to improve your debt-to-income ratio
- Save for a larger down payment to reduce your loan amount
- Improve your credit score to qualify for better rates
- Consider a longer loan term for lower monthly payments
- Look into down payment assistance programs
- Get pre-approved to know your exact budget
Example Scenario
Your Situation
- Annual income: $100,000
- Monthly income: $8,333
- Current debts: $500/month
- Down payment: $50,000
- Credit score: 740
Your Buying Power
- Max housing payment: ~$2,333/mo
- Estimated home price: ~$400,000
- Loan amount: ~$350,000
*Based on 28% housing ratio and current rates. Your results may vary.
Ready to see what you can afford?
Get pre-approved and know your exact budget before you start shopping.