How Much Home Can You Actually Afford?

When you get pre-approved for a mortgage, the lender gives you a number — the most they're willing to lend. It's easy to treat that as your budget. But the amount you can borrow and the amount you'll feel good about paying every month are two very different things.

A useful starting point is the 28/36 guideline: aim to keep your housing costs around 28% of your gross monthly income, and your total debt payments under 36%. It's not a hard rule, but it keeps you from stretching so far that a surprise expense throws everything off.

Remember that the mortgage payment isn't the whole picture. Property taxes, homeowners insurance, and — in some neighborhoods — HOA dues all add up. So does maintenance: a good rule of thumb is to set aside about 1% of the home's value each year for upkeep.

Our honest advice? Pick a monthly payment you'd be comfortable with even in a lean month, then work backward to a price. A home you can actually enjoy living in beats a home that keeps you up at night. If you'd like help running the numbers for your situation, we're glad to sit down with you.