Find out what you can actually afford before you start looking at homes. This calculator uses your income, debts, and down payment to show realistic home prices you can buy.
Most people get approved for more than they should spend. Banks might say yes to a big loan, but your comfort zone should be lower. The gap between what banks approve and what you should spend affects your money stress later.
The 28/36 rule gives basic help: housing costs should not go over 28% of your income before taxes. All debts together should stay under 36%. These are the highest amounts, not what you should aim for. Smart buyers often keep housing costs at 25% to have more money flexibility.
Your total income before taxes decides how much you can borrow. Banks check your income with pay stubs, tax papers, and job letters. Bonus money and overtime may count partly, based on how steady they are over two years.
Having a steady job helps your case. Changing jobs in the same field rarely causes problems. But switching careers can make approval harder.
Current debt payments lower your housing budget a lot. Credit cards, car loans, student loans, and other bills count toward debt ratios using the lowest required payments.
Paying down debt before home shopping can boost your budget greatly. Getting rid of a monthly car payment might let you buy a much more expensive home.
Bigger down payments get you better rates and remove mortgage insurance. While 20% down is still best, many programs take 3-10% down payments. First-time buyer programs, VA loans, and USDA loans give more choices.
Where your down payment comes from matters. Gift money needs paperwork, and borrowed money cannot work as down payment for most loans.
Property taxes, insurance, and upkeep add big costs beyond your house payment. These change a lot based on where you live and what type of home you buy. HOA fees, when they apply, also lower your available money for the mortgage.
Home repairs happen. Heating systems, roofs, and appliances need fixing or replacing over time. Plan for 1-2% of home value each year for upkeep.
Calculator results give you starting points, not final choices. Think about your comfort with risk, job future, and life plans. Young workers might stretch their budget more than people close to retirement.
Get pre-approved with real lenders for exact guidance. Shop with multiple lenders since rates and terms differ a lot between companies.
Start with careful estimates and check them with professionals. Real estate agents know local markets while mortgage brokers compare rates across lenders.
Get your paperwork ready early: recent pay stubs, bank statements, tax returns, and debt account details. Having these ready speeds up approval and shows sellers you are serious.