Find out exactly how much home you can afford based on your income, monthly debts, and down payment — using the same DTI ratios lenders use.
Calculate your maximum home purchase price using lender DTI ratios — so you know your real budget before you start shopping.
Connect with a mortgage broker who can give you a real pre-approval letter — so you're ready to make an offer when you find the right home.
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Affordability is more complex than just "what monthly payment can I handle?" Lenders use specific ratios to determine how much they'll lend — and understanding those ratios puts you in control of the home buying process.
DTI (Debt-to-Income ratio) compares your monthly debt payments to your gross monthly income. Lenders use two versions: front-end DTI (just housing costs) and back-end DTI (all debts). Most conventional lenders cap back-end DTI at 43–45%. FHA allows up to 57% with compensating factors. A lower DTI makes you a stronger borrower and opens more loan options.
A common guideline is to keep total housing costs (PITI) below 28% of gross monthly income. Conservative buyers often target 20–25%. The right number depends on your other financial goals — retirement savings, college funding, emergency reserves. Over-extending on housing can crowd out other wealth-building activities.
Yes. Lenders count student loan payments in your DTI calculation — either the actual monthly payment or 1% of the outstanding balance if on income-driven repayment. High student loan balances can constrain your buying power, but many first-time buyers successfully purchase homes while carrying significant student debt.
FHA loans are government-backed mortgages that allow lower credit scores (580+ for 3.5% down) and higher DTI ratios than conventional loans. They require mortgage insurance premiums (MIP) for the life of the loan if you put down less than 10%. FHA loans are strong for first-time buyers with limited down payment or credit challenges, but the lifetime MIP can be costly.
Every dollar of monthly debt reduces the housing payment lenders will approve. With $500/month in car and student loan payments and a 43% DTI cap, that $500 directly reduces your maximum mortgage payment by $500. Paying off debt before applying is one of the most effective ways to increase home buying power.