Understand Both Your Real Budget AND Lender Qualification
Your actual monthly budget after expenses
How the bank evaluates your application
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How much you can afford depends on your gross income, monthly debts, down payment, interest rate, and loan type. A common guideline is the 28/36 rule: spend no more than 28% of gross income on housing and 36% on total debt. Use our calculator above for a personalized estimate.
The 28/36 rule is a guideline lenders use: your housing payment should not exceed 28% of gross monthly income (front-end DTI), and total monthly debts should not exceed 36% of gross income (back-end DTI). FHA loans allow higher ratios up to 31/43.
DTI (Debt-to-Income ratio) directly determines how much you can borrow. Higher existing debts reduce the mortgage amount you qualify for. Paying off debts before applying can significantly increase your home buying budget. Check your DTI with our DTI Calculator.
Key factors include: gross household income, monthly debt payments, down payment amount, interest rate, loan term, property taxes, homeowners insurance, HOA fees, and the loan type (conventional, FHA, VA, USDA). Each affects your maximum qualifying amount.