Before you start house hunting, knowing your true price ceiling prevents heartbreak and protects your financial health. Our home affordability calculator uses your income, debts, down payment, and local tax estimates to show the maximum home price lenders will typically approve—and what feels comfortable for your budget.
Lenders use the 28/36 rule as a guideline: your monthly housing costs (mortgage, taxes, insurance) should not exceed 28% of gross monthly income (front-end ratio), and total monthly debt payments should not exceed 36% (back-end ratio).
Conventional loans can require as little as 3% down for first-time buyers. FHA loans require 3.5% with a 620+ credit score. A 20% down payment eliminates PMI and reduces your monthly payment significantly. VA and USDA loans offer 0% down for qualifying borrowers.
Yes. A higher credit score qualifies you for lower interest rates, which directly impacts how much home you can afford at a given monthly payment. Improving your score from 680 to 760 can lower your rate by 0.5–1%, saving tens of thousands over the loan term.
Yes. FHA loans, VA loans, USDA loans, and Fannie Mae's HomeReady program all offer lower down payment requirements. Many states also offer down payment assistance grants and low-rate programs through their Housing Finance Agencies (HFAs).
Closing costs typically run 2%–5% of the loan amount and include lender fees, title insurance, appraisal, attorney fees (in some states), and prepaid taxes and insurance. On a $300,000 home, expect $6,000–$15,000 in closing costs.
Most conventional lenders cap DTI at 43%. FHA loans allow DTI up to 50% in some cases. Lower DTI means more borrowing power. To improve DTI before applying, pay down existing debts or avoid taking on new car loans or credit card balances.