How Much House Can I Afford? A Complete Guide for Homebuyers

Buying a home is one of the biggest financial decisions you’ll ever make—and one of the most exciting. But before you fall in love with that Pinterest-perfect kitchen or dreamy backyard, there’s one essential question to ask:

👉 How much house can I actually afford?

This isn’t just about your mortgage payment. It’s about your overall financial health, monthly budget, future goals, and hidden costs most first-time buyers don’t anticipate. Let’s break it all down.

💰 The 28/36 Rule: A Trusted Starting Point

Most lenders follow the 28/36 rule to determine what you can safely afford:

• 28% of your gross monthly income (before taxes) can go toward housing expenses (mortgage, taxes, insurance).

• 36% of your gross monthly income can go toward total debt (housing + student loans, car payments, credit cards, etc.).

Example:
If your monthly gross income is $6,000:

• 28% = $1,680 for your mortgage, taxes, and insurance

• 36% = $2,160 for all your debts combined

🏦 What Lenders Look At

When applying for a mortgage, lenders consider several key factors:

1. Income

They’ll verify your consistent income source—salary, hourly wages, freelance, or business earnings.

2. Credit Score

A higher credit score helps you get better loan terms and interest rates.

3. Debt-to-Income (DTI) Ratio

DTI is your total monthly debt divided by gross income. Most lenders prefer a DTI under 43%.

4. Down Payment

The more you put down, the less you borrow—making you a less risky buyer.

5. Loan Type

Different mortgage types (FHA, conventional, VA, etc.) have different qualification standards and down payment requirements.

🛠️ Costs Beyond the Mortgage

When budgeting for a house, don’t forget these extras:

• Property taxes (can vary widely by location)

• Homeowners insurance

• HOA fees (if applicable)

• Utilities and maintenance

• Repairs and upgrades

• Private Mortgage Insurance (PMI) if your down payment is less than 20%

📊 Use Online Affordability Calculators

Plug your numbers into a mortgage affordability calculator (like those from Zillow or NerdWallet) to get a ballpark estimate. But don’t treat it as gospel—it’s a starting point, not a financial plan.

🧠 Pro Tips

• Be conservative. Just because a lender approves you for a certain amount doesn’t mean you should borrow that much.

• Leave room for lifestyle. Make sure you still have money for travel, dining out, saving, and unexpected expenses.

• Get pre-approved. This helps you shop with confidence and shows sellers you’re a serious buyer.

🎯 Final Thought

“How much house can I afford?” isn’t just a math question—it’s a life question. You want a home that fits your lifestyle, your goals, and your budget. Start with the numbers, but let your values guide your decision.

Ready to take the next step? Contact me at Joanne Bacourt | CENTURY 21 Carioti, FL to help get you in your dream property.