📋 Table of Contents
How Much House Can You Afford?
Determining home affordability involves more than just what a lender will approve — understanding your comfortable monthly budget prevents becoming "house poor."
Common Affordability Guidelines
| Guideline | Rule of Thumb |
|---|---|
| 28% rule | Housing costs shouldn't exceed 28% of gross monthly income |
| 36% rule | Total debt payments shouldn't exceed 36% of gross monthly income |
Why Lender Approval Isn't the Same as "Affordable"
Lenders may approve you for a higher amount than genuinely fits your comfortable budget, since their calculations don't always account for your specific spending habits, savings goals, or other financial priorities.
Factor in All Housing Costs
Your true monthly housing cost includes principal, interest, property taxes, insurance, and potentially HOA fees — not just the base mortgage payment lenders sometimes emphasize.
Common Mistakes
Borrowing the maximum amount a lender approves without considering your own comfortable budget, savings goals, or ability to handle unexpected expenses alongside housing costs.
Frequently Asked Questions
Not necessarily — lender approval reflects what you can qualify for, not necessarily what fits comfortably within your personal budget and other financial goals.
Principal, interest, property taxes, homeowners insurance, and potentially PMI or HOA fees — all of these should factor into your affordability calculation, not just the base loan payment.