Home Buying
How much home can you actually afford?
Before you fall in love with a listing, figure out the number that keeps you comfortable. Here's how lenders think about affordability — and how to set your own budget.
The house you can afford and the loan you can qualify for are two different numbers. The bank looks at ratios; you have to live in the payment. The goal is to find the overlap — a home you love with a payment that still leaves room for the rest of your life.
Start with your monthly payment, not the price
Sticker price is the wrong anchor. What matters is the all-in monthly payment: principal, interest, property taxes, homeowners insurance, and — if you put less than 20% down — mortgage insurance. Two homes at the same price can carry very different payments once taxes and insurance are in the mix.
A common guideline is to keep your total housing payment at or below about 28% of your gross monthly income, and your total debt (housing plus car loans, student loans, and credit cards) under roughly 36–43%. Those are starting points, not rules — but they keep you out of trouble.
Don't forget the cash to close
Your down payment is only part of the cash you'll need. Closing costs typically run 2–5% of the loan amount, and lenders like to see a little cushion left over afterward. Budgeting for both keeps the process smooth and your reserves intact.
Get a real number in minutes
Rules of thumb are a fine place to start, but your real number depends on your income, debts, credit, and today's rates. Our affordability and payment calculators give you a personalized estimate in a couple of minutes — and a loan officer can turn that into a pre-approval whenever you're ready.