Your Financial Information
Enter your income and expenses to find your budget
Your Results
Based on your $85,000 income, you can comfortably afford a $360,000 home (28% DTI). Your maximum stretch budget is $420,000 (36% DTI). Monthly payment would be around $2,200.
Budget Options
Debt-to-Income Ratio
Monthly Payment Breakdown
Your Affordability at a Glance
See how different budget levels affect your home buying power
| Budget Level | Home Price | Loan Amount | Monthly Payment | DTI Ratio |
|---|---|---|---|---|
| Conservative (25%) | $305,000 | $245,000 | $2,083 | 31% |
| Recommended (28%) | $360,000 | $300,000 | $2,333 | 34% |
| Stretch (36%) | $490,000 | $430,000 | $3,000 | 42% |
How Income Affects Your Budget
See what you can afford at different income levels
Hidden Costs of Homeownership
Budget for these expenses beyond your mortgage payment
Closing Costs
Includes appraisal, title insurance, origination fees, and more.
Maintenance
HVAC, plumbing, roof repairs, appliance replacement.
Utilities
Electricity, gas, water, sewer, trash, internet.
Moving Costs
Movers, truck rental, packing supplies, deposits.
Understanding Affordability
The 28/36 Rule Explained
Lenders use the 28/36 rule to determine how much you can borrow:
Your housing costs (mortgage, taxes, insurance, HOA) should not exceed 28% of your gross monthly income.
Your total monthly debt payments (housing + car loans + student loans + credit cards) should not exceed 36% of your gross monthly income.
What Lenders Consider
- Credit Score: Higher scores = better rates and larger loan amounts. 740+ gets the best rates.
- Debt-to-Income Ratio: Lower is better. FHA allows up to 43%, conventional loans prefer under 36%.
- Down Payment: 20% avoids PMI. FHA requires 3.5%, some loans allow 3%.
- Employment History: 2+ years of steady income is preferred.
- Cash Reserves: Having 2-3 months of mortgage payments saved helps.
How to Increase Your Budget
Pay Down Existing Debt
Reducing monthly debt payments improves your DTI ratio significantly.
Improve Your Credit Score
Better credit = lower rates = more buying power at the same payment.
Save a Larger Down Payment
More down = smaller loan = lower monthly payment = higher price point.
Consider a Longer Loan Term
30-year loans have lower payments than 15-year, allowing a higher budget.
Comfortable vs Maximum Budget
Just because you can afford a certain amount doesn't mean you should borrow that much.
- Unexpected repairs and maintenance
- Emergency fund growth
- Retirement savings
- Lifestyle and travel
- Future family changes
Frequently Asked Questions
A common guideline is that you can afford a home worth 2.5 to 3 times your annual income. So with a $100,000 salary, you could likely afford a $250,000-$300,000 home. However, this varies based on your debts, down payment, interest rate, and other factors.
Most lenders prefer a total (back-end) DTI of 36% or less, though some allow up to 43-50% with compensating factors. Your housing (front-end) DTI should ideally be 28% or less. Lower is always better for financial flexibility.
No, 20% is not required. Conventional loans allow as little as 3% down, FHA loans require 3.5%, and VA/USDA loans can be 0% down. However, putting down less than 20% usually requires PMI (private mortgage insurance), which adds to your monthly payment.
A typical mortgage payment includes PITI: Principal, Interest, Taxes, and Insurance. If you have an HOA or PMI, those are added too. Principal reduces your loan balance, while the rest are costs of homeownership.
A higher credit score qualifies you for lower interest rates. The difference between a 620 score and a 760+ score could be 0.5-1% in rate, which translates to tens of thousands of dollars over the life of your loan—and a lower monthly payment, which increases your buying power.