· Scenario 04 · Affordability
How much house can I afford?
Income, debts and cash down, read the way a lender reads them.
Scenario 04
How to use it
- Enter your household income before taxes.
- Enter your monthly debt payments: car loans, student loans, credit card minimums.
- Enter the cash you have for the down payment, and the rate.
- Read the max price a lender would qualify you for, and the monthly housing budget behind it.
· The calculator
Your max price.
Income, debts, cash down: the price lenders will actually qualify you for.
· Estimated max price
$—
Assumes a 30-year fixed, 43% debt-to-income, typical taxes and insurance.
Lenders vary. This is the honest ballpark, not an approval.
The reasoning behind it
Lenders cap the share of income that can go to debt. The tool applies typical ratios, subtracts your other debts, turns what is left into a loan amount at your rate, and adds your down payment.
Lenders vary, so this is the honest ballpark, not an approval. And whether you should spend the max is a different question: the number is the ceiling, not the target.
· Questions left?
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