Lenders approve a maximum — but comfort decides the right number. Here's how to find yours.
Your income says one number, your comfort says another. Lenders will approve you for a maximum — usually where your total debts hit 43 to 45 percent of your gross monthly income — but the smartest buyers work backward from the monthly payment they can make while still saving, traveling, and sleeping well.
Start with the 28/36 guideline: aim to keep housing costs (principal, interest, taxes, insurance, and any HOA dues) under 28 percent of gross income, and all monthly debts under 36 percent. Then stress-test it. What happens if rates rise before you buy? If property taxes reassess? If one income pauses for parental leave?
Finally, remember the costs beyond the payment: maintenance runs roughly 1 percent of the home's value per year, and closing costs add another 2 to 5 percent upfront. A home you can truly afford is one where these numbers fit without heroics — and where pre-approval confirms it in writing before you fall in love with a listing.