How much house can you afford

Determining how much house you can afford is a critical first step when looking to buy a home. The general rule of thumb is that your monthly housing expenses should not exceed 28-30% of your gross monthly income. This includes your mortgage payment, property taxes, insurance, and any other home-related costs. To get a more accurate picture, it’s important to assess your monthly budget, factoring in your income, debts, and other financial obligations. Lenders typically consider your debt-to-income (DTI) ratio when determining how much they’re willing to lend, so it’s important to keep this ratio in check.

Beyond the monthly payment, remember to account for additional costs such as the down payment, closing costs, and maintenance expenses. The more you can save for a down payment, the lower your mortgage will be, which could help you secure a better interest rate. Additionally, consider your long-term financial goals and lifestyle. While it may be tempting to buy a larger home, it’s essential to ensure you can comfortably manage the monthly payments, utilities, and unexpected repairs. By carefully evaluating your finances and staying within your means, you’ll set yourself up for success and avoid putting unnecessary strain on your budget.