Get a more accurate estimate
Get pre-qualified by a local lender to see an even more accurate estimate of your monthly mortgage payment.
You’ll also be ready to act fast when you find the perfect home.
Affordability Calculator Help
Our home affordability payments calculator can help you estimate what you can afford to spend on your new home. Here’s the info you’ll need to enter into the affordability calculator:
How Much Home Can I Really Afford?
The 28/36 Rule for Affordability
One rule of thumb that lenders may use to assess how much of a mortgage you qualify for is the 28/36 rule. This rule says that your mortgage payment (which includes property taxes and homeowners insurance) should be no more than 28% of your pre-tax income, and your total debt (including your mortgage and other debts such as car or student loan payments) should be no more than 36% of your pre-tax income. While these numbers are used as a guide by many lenders, there are some cases where you may be able to have a higher. For example, some lenders may allow borrowers with a higher credit score to have slightly higher DTI ratios. And some loans allow for higher DTIs, such as FHA loans, which allow up to 43% or higher in some cases.
Getting pre-qualified for a mortgage is an important step in determining how much home you can afford. During this process, a lender will assess your finances to determine how much they are willing to lend you. This number can help you shop within your means, but remember that just because you qualify for a specific amount doesn’t necessarily mean you can afford it. The pre-qualification process typically takes your income and debts into account, but it doesn’t include your personal savings goals or spending habits. A lender’s assessment is important, but ultimately you have the final say in what you’re comfortable spending on your next home.
More Factors that Affect Your Affordability
Income, debts and down payment are big factors when it comes to calculating your affordability. But there are other factors to be aware of, too. Believe it or not, the interest rate you get could make a big difference in how much home you can afford because a lower interest rate could significantly lower your monthly mortgage payment. Your personal savings goals or spending habits can also make a big impact on your affordability, so remember to consider these when setting your home shopping budget.
More Resources from Rooted and Company
Let’s talk about your goals in the home buying or investing process and discuss the best path forward. Please give us a call at 801.449.0602 or send an email to email@example.com to get in touch.
Providing the Most Accurate Estimate With Competitive Market Analysis Process.
We provide the most accurate value of a home for sale. This is over 2x likely to be within 3% of the home’s selling price as other top online home-value estimators. This is not a formal appraisal or substitute for the in-person expertise of a real estate agent or professional appraiser.