How much house can I afford
A quick, honest way to set a home budget that feels good now and later. You will use your income, current monthly debts, down payment, and local taxes to land on a payment range that fits your life.
What lenders look at
- Debt to income ratio Many lenders want your total monthly debts plus the new housing payment to stay near 36% to 45% of gross income. Lower is safer for you.
- Credit score Better credit can lower your rate and your monthly payment. See credit score basics and quick wins.
- Down payment and reserves More down can reduce the loan amount and private mortgage insurance. Lenders also like to see a few months of payment reserves.
- Property taxes and insurance These vary by city and will change your max price more than you think.
A simple way to set your target payment
Pick a comfortable all in monthly number that fits your budget. All in means principal, interest, property tax, homeowner insurance, and any HOA fee. Most buyers feel balanced when housing stays near 25% to 35% of gross monthly income, but your comfort matters more than a formula.
How to estimate your price from a payment
Use these steps to get a realistic price range before you tour homes.
- List current monthly debts Car, student loans, credit cards, personal loans.
- Choose a target total debt ratio For example 40% of gross income.
- Subtract your current debts The remainder is your safe housing payment.
- Estimate taxes and insurance Use a realistic local estimate from recent listings in your city.
- Back into price With rate and down payment, a lender or a quick calculator can convert your target payment into a price range.
When you are close, a local lender can fine tune the numbers. See pre approval versus pre qualification.
Common pitfalls to avoid
- Ignoring taxes and HOA 2 similar homes can have very different monthly costs.
- Chasing the max Pre approval limits are not a spending goal. Choose comfort over max.
- Skipping a buyer agent A good agent helps you balance wants and needs within budget, reads the market, and keeps you from overpaying in fees or repairs. Listing agents work for the seller.