How Much House Can You Really Afford?

When you’re in the market to buy a home, one of the first questions that comes up is: “How much house can I afford?” It’s a super important question and getting it right can make all the difference in ensuring you’re comfortable with your mortgage payments both now and down the road. So, how do you figure it out?

Start with the Basics: Your Budget

Before diving into numbers, it’s good to get a clear picture of your overall financial health. Start by understanding your monthly income, expenses, and how much you can comfortably allocate toward housing. It’s not just about what you qualify for; it’s about what works for you. You’ll want to think about both your current financial situation and any changes on the horizon—like career shifts, expanding your family, or those rainy-day surprises we all experience.

And remember, when you become a homeowner, you’ll be responsible for more than just your mortgage payment. Don’t forget to factor in property taxes, homeowner’s insurance, maintenance costs, and maybe even HOA fees.

Use a Home Affordability Calculator

A great way to get a clearer sense of what you can afford is by using a home affordability calculator. At Mortgage Investors Group (MIG), we’ve made it easy for you to crunch the numbers. Check out our Home Affordability Calculator to help you get started. It considers things like your income, monthly debts, and how much you plan to put down on your home. It’s a simple tool to give you a ballpark figure and a great starting point.

However, while the calculator is helpful, it’s not a substitute for personalized advice, which brings us to the next important step—working with a Loan Officer.

Why You Need a Loan Officer on Your Team

Your budget is unique to you, and while online calculators can give you an estimate, working directly with a Loan Officer is the best way to get an accurate picture of your financial options. Loan Officers are like your personal mortgage advisors. They don’t just plug numbers into a calculator; they look at your whole financial situation and can get creative with financing options that work specifically for you.

For example, did you know that there are different loan programs available, each with varying down payment requirements, interest rates, and terms? A Loan Officer can guide you through these options and might even find programs you weren’t aware of that make your home purchase more affordable than you initially thought. Whether it’s FHA loans (for lower down payments), VA loans (for veterans), or conventional loans, there’s more to financing than one-size-fits-all.

Plus, they’re experts at helping you avoid some common pitfalls. For example, maybe you’re eyeing a house at the top of your budget range—but that might mean having to stretch a little too thin when it comes to repairs or emergency costs. A Loan Officer can help ensure you’re not only getting the best deal but that you’re setting yourself up for long-term success.

How to Calculate What You Can Afford

While calculators and Loan Officers can help with specifics, there are general rules of thumb that can guide your affordability range. A popular one is the 28/36 rule. This rule suggests:

  • You shouldn’t spend more than 28% of your gross monthly income on housing costs (including mortgage, property taxes, and insurance).
  • And your total debts, including your mortgage, should be 36% or less of your gross income​.

But keep in mind—this is just a guideline. Life happens, and your affordability might look different based on your unique goals and lifestyle.

Get Started with Confidence

At the end of the day, the best way to understand how much house you can afford is by getting personalized advice from a Loan Officer and using tools like MIG’s Home Affordability Calculator. With the right plan and expert guidance, you can confidently move forward in your home-buying journey, knowing you’ve made smart financial decisions for your future.

Your dream home is within reach, and we’re here to help you find the perfect fit!