Question 1

How much house can I afford?

Accepted Answer

Lenders typically use the 28/36 rule: housing costs should not exceed 28% of gross income, and total debt payments should not exceed 36%. Our calculator uses your income, debt payments, down payment, and credit score to determine your maximum affordable home price.

Question 2

How much should I put down on a house?

Accepted Answer

A 20% down payment is ideal as it avoids PMI (Private Mortgage Insurance) and gets better interest rates. However, many loans allow as little as 3-5% down. Our calculator shows the trade-offs between different down payment amounts and helps you find the optimal strategy.

Question 3

What are closing costs and how much are they?

Accepted Answer

Closing costs typically range from 2-5% of the home price and include loan origination fees, title insurance, appraisal, inspection, and prepaid expenses. Our calculator estimates closing costs and shows the total upfront cash needed to purchase a home.

Question 4

What is debt-to-income ratio and why does it matter?

Accepted Answer

Debt-to-income (DTI) ratio is your total monthly debt payments divided by gross monthly income. Lenders prefer DTI below 43%, with 36% or lower being ideal. A high DTI can limit your borrowing capacity or result in higher interest rates.

Question 5

How does credit score affect home buying?

Accepted Answer

Credit score directly impacts your mortgage interest rate. Scores above 760 get the best rates, while scores below 620 may face challenges getting approved. Our calculator adjusts interest rates based on your credit score to show realistic affordability.

Home Buying Affordability Calculator

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