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Getting Started

Finding a Home

Financing a Home

Closing on a Home

How much house you can afford?

Figuring how much house you can comfortably afford can be complicated, so know your budget before you begin shopping.


Here are some things to consider before you decide to buy a house:

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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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Consider this rule of thumb for deciding 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% of your income 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 car or student loans.
  • 31% of your income goes toward taxes.
    That's the national average.
  • 33% of your income 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.

Understand the 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 homebuying process Application fee (Opens Overlay)

Earnest money (Opens Overlay)

Origination fees (Opens Overlay)

Closing costs (Opens Overlay)

Title insurance (Opens Overlay)
One-time fee

One-time fee (credited at closing)

One-time fee

One-time fee (typically between 2-6% of the loan amount)

One-time fee
After you buy a house Property taxes

Private mortgage insurance (PMI) (Opens Overlay)

Homeowners, hazard or flood insurance (Opens Overlay)

Homeowners association dues (Opens Overlay)

Utilities (water, gas, sewage, etc.)

Maintenance & repairs

Lawn care and landscaping

Monthly through an escrow account or semi-annually

Monthly through an escrow account or annually

Monthly and/or annually

Monthly or quarterly



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