Calculate your maximum affordable home price based on income, debts, down payment, and loan requirements. Get personalized results for different loan types.
Determining how much house you can afford involves more than just your income. Lenders use debt-to-income (DTI) ratios to assess your ability to manage monthly payments along with your existing financial obligations. Understanding these ratios helps you shop for homes within your budget and improves your chances of loan approval.
Different loan types have different qualification standards, and each offers unique advantages depending on your situation. By understanding these requirements, you can choose the best loan program and prepare for the home buying process.
Includes principal, interest, taxes, insurance, and HOA fees
Includes housing costs plus credit cards, loans, and other debts
| Loan Type | Front-End DTI | Back-End DTI | Down Payment | Credit Score | Special Features |
|---|---|---|---|---|---|
| Conventional | ≤ 28% | ≤ 36% | 3-20% | 620+ | PMI if <20% down |
| FHA | ≤ 31% | ≤ 43% | 3.5% | 580+ | Mortgage insurance |
| VA | No limit | ≤ 41% | 0% | No minimum | Veterans only |
| USDA | ≤ 29% | ≤ 41% | 0% | 640+ | Rural areas only |
| Component | Typical Range | Description |
|---|---|---|
| Principal & Interest | 70-85% of payment | Loan repayment |
| Property Taxes | 0.5-2.5% of home value | Annual tax to local government |
| Home Insurance | $300-$2,000/year | Property protection coverage |
| PMI/MIP | 0.3-1.9% of loan | Mortgage insurance (if required) |
| HOA Fees | $50-$500/month | Community maintenance costs |
Increase Income: Overtime work, side jobs, salary negotiations, or additional income sources
Reduce Debt: Pay down credit cards, auto loans, and other monthly obligations
Improve Credit Score: Pay bills on time, reduce credit utilization, fix credit report errors
Save for Larger Down Payment: Reduces loan amount and may eliminate PMI
Consider Different Locations: Lower-cost areas increase purchasing power
| Region | Median Home Price | Property Tax Rate | Income Needed* |
|---|---|---|---|
| San Francisco, CA | $1,400,000 | 0.75% | $350,000 |
| New York, NY | $800,000 | 1.25% | $200,000 |
| Austin, TX | $550,000 | 1.80% | $140,000 |
| Atlanta, GA | $400,000 | 0.90% | $100,000 |
| Indianapolis, IN | $250,000 | 1.10% | $65,000 |
*Approximate household income needed for median-priced home
Focusing Only on Monthly Payment: Ignoring property taxes, insurance, and maintenance costs
Maxing Out Budget: Not leaving room for emergencies or lifestyle changes
Ignoring Total Cost: Considering only purchase price, not long-term ownership costs
Skipping Pre-Approval: Shopping without knowing actual qualification amount
Forgetting Closing Costs: Not budgeting for 2-5% in closing expenses
| Factor | Impact on Qualification | What Lenders Look For |
|---|---|---|
| Employment History | High | 2+ years stable employment |
| Assets & Savings | Medium | 2+ months reserves |
| Credit History | High | No recent late payments |
| Property Type | Medium | Single-family preferred |
| Loan Amount | Medium | Conforming limits vary by area |
Spring Market: More inventory, higher competition, peak pricing
Summer Market: Strong activity, family-friendly timing, good weather for viewing
Fall Market: Motivated sellers, fewer buyers, better negotiation opportunities
Winter Market: Limited inventory, serious buyers and sellers, possible deals
| Income Level | At 5% Rate | At 6% Rate | At 7% Rate | Difference (5% vs 7%) |
|---|---|---|---|---|
| $50,000 | $180,000 | $165,000 | $150,000 | -$30,000 |
| $75,000 | $270,000 | $248,000 | $225,000 | -$45,000 |
| $100,000 | $360,000 | $330,000 | $300,000 | -$60,000 |
| $150,000 | $540,000 | $495,000 | $450,000 | -$90,000 |
Budget Clarity: Know exactly how much you can spend before shopping
Stronger Offers: Sellers prefer buyers with financing already secured
Faster Closing: Much of the paperwork completed upfront
Rate Protection: Some lenders offer rate locks during pre-approval period
Negotiation Power: Cash-equivalent offer strength in competitive markets