Home Affordability Calculator

Using the 28/36 rule, with a $50K annual salary you can afford monthly housing costs of about $1,167 (28% of gross monthly income). This typically translates to a home price of $200,000 to $250,000 depending on your down payment, interest rate, and other debts. Use our calculator for a personalized estimate.

The 28/36 rule states that you should spend no more than 28% of your gross monthly income on housing expenses (mortgage, taxes, insurance) and no more than 36% on total debt payments (housing plus credit cards, car loans, student loans). Lenders use this ratio to determine how much they're willing to lend you.

Your debt-to-income (DTI) ratio is the percentage of your gross monthly income that goes toward paying debts. Most lenders prefer a DTI of 43% or lower for a qualified mortgage. A lower DTI means you can qualify for a larger loan and better interest rates. Paying down debt before applying for a mortgage can significantly increase your buying power.

Credit score requirements vary by loan type: Conventional loans typically require 620+, FHA loans require 580+ (or 500 with 10% down), VA loans have no official minimum but most lenders want 620+, and USDA loans require 640+. Higher credit scores (740+) qualify for the best interest rates, potentially saving you thousands over the life of the loan.

While 20% down is traditional and eliminates PMI, many programs allow much less: Conventional loans as low as 3%, FHA loans at 3.5%, VA and USDA loans with 0% down. On a $300,000 home, 20% down is $60,000, while 3% down is just $9,000. Consider that a smaller down payment means higher monthly payments and PMI costs.

Yes, many people buy homes while carrying student loans. Lenders look at your DTI ratio, so manageable student loan payments won't necessarily disqualify you. Income-driven repayment plans may be used to calculate your DTI. Focus on making payments on time to build credit and consider paying down higher balances to improve your debt ratio.