Getting Started


Finding a Home



Financing a Home



Closing on a Home


How much house can I afford?

To figure out how much house you can afford, let’s take a look at some financial considerations. We’ll also explain the costs of homeownership and you can use our powerful mortgage calculator to help determine a comfortable loan amount.

 

Before you decide to buy a house, answer these questions:

 
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How much can I afford?

Shopping for a new home? Find out how much you can afford.

 
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Rule of thumb for what you can afford

You'll hear different advice on what you can afford depending on who you ask, but a good rule of thumb is to keep to these limits:

 
  • 36% goes to pay debts.
    Banks generally advise that your mortgage payment not be more than 28% of your monthly income, leaving 8% for other debts like a car loan.
  • 31% of your income goes toward taxes.
    That's the national average.
  • 33% goes toward everything else.
    Food, clothes, entertainment, vacations, savings, and investments that you put away for a rainy day.

 
graphical image for Rule of Thumb for what you can afford: Taxes - 31 percent. Debt - 36 percent. Everything else - 33 percent.
 

Cost of homeownership

Your mortgage payment is just one of the expenses of buying a home. You'll face a number of one-time fees, as well as new monthly and annual costs. The table below describes some of the fees and expenses you can expect to pay.

 
Homeownership expenses What How often
Before you buy a house Credit Report

Home Appraisal
Home Inspection (Opens Overlay)

Termite Inspection
One-time fee (credited at closing)
One-time fee
One-time fee (typically between $200-$500)
One-time fee
During the home buying process Application Fee
Good Faith Deposit

Origination Fees
Closing Costs (Opens Overlay)

Title Insurance
One-time fee
One-time fee (credited at closing)
One-time fee
One-time fee (typically between 2% and 6%)
One-time fee
After you buy a house Property Taxes
Private Mortgage Insurance (Opens Overlay)
Homeowner's Insurance (Opens Overlay)
Homeowners Association Dues
Utility (Water, Gas, Sewage, etc.)
Maintenance & Repairs
Lawn Care/Landscaping
Monthly
Monthly
Monthly/Annual
Monthly/Annual

Monthly

Ongoing
Ongoing