How much mortgage can I afford?

Let's face it—figuring out how much mortgage you can afford feels a bit like trying to solve a math problem with no calculator in sight. The stakes are high, and the numbers can be daunting. But don't worry! We're here to break it down in a way that's simple, clear, and—dare we say—even fun.

The 28/36 Rule (Your New Best Friend)

A quick and easy way to gauge affordability is the 28/36 Rule:

• 28% Rule: Your monthly housing costs (mortgage payment, property taxes, and insurance) shouldn't exceed 28% of your gross monthly income.
• 36% Rule: Your total monthly debt (housing costs + other debts like student loans or car payments) shouldn't exceed 36% of your gross monthly income.

Factors That Impact How Much You Can Borrow

• Income: Lenders want to know how steady and reliable your earnings are.
• Credit Score: The higher your score, the better your interest rate (and borrowing power).
• Debt-to-Income Ratio (DTI): The lower your DTI, the more room you have for a mortgage.
• Down Payment: A larger down payment means a smaller loan (and possibly no PMI). Aim for 20% if you can.
• Interest Rates: Even a small change in rates can impact your budget significantly.

How to Estimate Your Mortgage

Instead of pulling out a spreadsheet, use the Real Estate Mortgage Calculator Platform. Just plug in:

• Your annual income
• Credit score
• Monthly debt payments
• Desired loan term

In seconds, you'll see your estimated loan amount, monthly payment, and even the best mortgage options tailored to your profile.

Pro Tips to Stay on Budget

• Don't Max Out Your Loan: Just because a lender says you can afford a $400,000 home doesn't mean you should. Leave room for emergencies and lifestyle expenses.
• Factor in Hidden Costs: Property taxes, insurance, HOA fees, and maintenance can add up quickly.
• Think Long-Term: Will your income grow, or are there major life changes (like kids) on the horizon?

Start calculating today and take the guesswork out of homeownership!