💰 Home Affordability Calculator
Find out how much house you can afford based on your income, debts, and down payment.
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💡 Tip: Most lenders prefer a DTI ratio under 36%, though some allow up to 43-50% for qualified borrowers. A lower DTI gives you more financial flexibility.
How to Calculate Home Affordability
Determining how much house you can afford involves more than just looking at the sticker price. Lenders typically use two key ratios to determine your maximum mortgage: the front-end ratio (housing costs vs. income) and back-end ratio (total debt vs. income).
The 28/36 Rule
Most lenders recommend spending no more than 28% of your gross monthly income on housing costs (mortgage, taxes, insurance) and no more than 36% on total debt (housing + car loans + credit cards + student loans).
Factors That Affect Affordability
- Down payment: Larger down payments reduce your loan amount and monthly payments
- Interest rate: Even 0.5% difference significantly impacts total cost
- Property taxes: Vary widely by location, from 0.3% to 2.5% annually
- HOA fees: Can add $200-$500/month to housing costs
Frequently Asked Questions
How much house can I afford on a $100K salary?
With a $100K salary, you can typically afford a home priced between $300K-$400K, depending on your down payment, debts, and local property taxes. Using the 28% rule, your max monthly housing cost would be around $2,333.
What credit score do I need to buy a house?
Conventional loans typically require 620+, FHA loans accept 580+ (with 3.5% down) or 500+ (with 10% down). Higher scores get better interest rates, potentially saving tens of thousands over the loan term.
How much should I put down on a house?
While 20% down avoids PMI, many buyers put down 3-10%. First-time buyers average 6-7% down. Consider your cash reserves and investment opportunities when deciding.