How Much House Can I Afford?
The maximum amount of money at which you can buy a home is determined by analyzing your income, debt, and the current mortgage rates. You will also want to target the amount you would like your monthly mortgage payment to be, as this can play a factor in how much the price of the home should be as well. Our mortgage calculator can help you get an idea of how much you can afford by calculating the percentage of your income spent on monthly debt, since most lenders limit your debt-to-income ratio. The conventional loan limit is 36% of your monthly income, but FHA loans could allow for it to be higher. Your remaining income after debt (including a mortgage payment) and taxes should be enough to cover living expenses and savings goals.