How Much House Can I Afford? A Real-World Guide for Homebuyers

Buying a home is exciting but it can also feel confusing, especially when you hear wildly different numbers from online calculators, lenders, friends, and family.

You might be asking:

• “I make good money… so why does the house price still feel tight?”
• “How do lenders actually decide what I can afford?”
• “What does that monthly payment really include?”

This guide breaks it all down in plain English so you can understand what homeownership truly costs, how debt-to-income (DTI) works, and how to estimate a comfortable price range not just the max you might be approved for.

1. Income vs. Affordability: The Big Misconception

One of the biggest myths in real estate is:

“If I’m approved for X, I can afford X.”

Approval and affordability are not the same thing.

Lenders look at:

• Gross monthly income (before taxes)
• Monthly debts
• Credit profile

They do not account for:

• Your lifestyle
• Childcare
• Travel
• Groceries, gas, subscriptions
• Your comfort level with risk

That’s where you come in.

2. What Is Debt-to-Income Ratio (DTI)?

DTI is one of the most important numbers in home buying.

DTI = Total Monthly Debt ÷ Gross Monthly Income

There are two types:

• Front-end DTI → housing costs only
• Back-end DTI → housing + all other monthly debts

Most conventional loans prefer:

• 28–31% ratio for housing
• 36–45% ratio for total debt
  (Some programs allow higher but higher DTI = tighter budget)

3. What’s Really in a Monthly Mortgage Payment?

Your mortgage payment is more than just the loan:

PITI =

• Principal
• Interest
• Taxes
• Insurance

And possibly:

• HOA fees
• Mortgage insurance (PMI)
• Maintenance (often overlooked)

That’s why a $2,200 mortgage can feel very different from $2,200 in rent.

4. A Smarter Way to Think About Affordability

Instead of asking “What’s the most I can buy?”
Ask:

“What payment still lets me live my life?”

A healthy approach:

• Keep housing around 25–30% of gross income
• Leave room for savings and emergencies
• Plan for maintenance (even new homes need it)

5. Try the Home Affordability Calculator

Below is a simple calculator you can use to estimate a comfortable home price range based on:

• Income
• Monthly debts
• Interest rate
• Down payment
• Property taxes & insurance

Please note: This is an estimate not a loan approval. Always confirm with a licensed lender.

Interactive Home Affordability Calculator

What this calculator does:

• Uses a target DTI (default 28%)
• Converts monthly affordability into an estimated purchase price
• Shows how small changes affect you buying power

6. What This Calculator Doesn’t Replace

This tool is meant to:

• Educate
• Set expectations
• Start smart conversations

It does not replace:

• A lender’s full pre-approval
• Program-specific guidelines
• Local tax and insurance variations

At the end of the day, the goal is to buy a home that supports your life, not one that quietly stretches it thin. Online calculators and lender approvals can provide a starting point, but they don’t know your personal priorities, your lifestyle, or how you want to feel month after month once the excitement of move-in fades. True affordability is about balance leaving room for savings, unexpected expenses, and the freedom to actually enjoy your home. Understanding how debt-to-income ratios work, how monthly costs really add up, and how small changes can impact your buying power, you are informed, confident and set up for long-term stability.

Ready to move from “what if” to “what’s possible”? Let me connect you with a trusted lender to review your numbers, talk through your goals, and map out a price range that actually works for your life.

Dionne Aiken
‍REALTOR® | Coldwell Banker Realty
📍 Central Florida
‍legacymoves.com

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