Buyer Tools

How Much Home Can You Afford?

Free Affordability Calculator Based on the 28/36 DTI Rule

Enter your financial details below to calculate your maximum home price and see a full monthly payment breakdown. This tool uses the same debt-to-income ratios that lenders evaluate.

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Enter your details and click Calculate

A calculator gives estimates. A pre-approval gives answers.

📞 Call James — (586) 722-8800

Understanding the Numbers

The 28/36 DTI Rule

Lenders use two debt-to-income ratios. The front-end ratio (28%) limits your total housing costs relative to gross income. The back-end ratio (36%) limits all debt payments combined. This calculator uses the more restrictive of the two.

Down Payment Impact

A larger down payment directly increases your maximum home price because it reduces the loan amount and monthly payment. Putting 20% down also eliminates PMI, saving you $100-$300/month.

Why Get Pre-Approved

Pre-approval gives you a verified borrowing limit backed by your actual credit and income. Sellers take pre-approved offers more seriously — it can make the difference between winning and losing a home.

Frequently Asked Questions

What is the 28/36 rule for home affordability? +
The 28/36 rule states that no more than 28% of your gross monthly income should go toward total housing costs and no more than 36% toward all monthly debt payments combined. Some programs like FHA allow higher ratios.
How much income do I need to buy a $300,000 home? +
At 6.75% interest with 10% down, you'd need approximately $75,000–$85,000 in annual gross income, depending on your debts, property tax rates, and insurance. Use the calculator above with your specific numbers.
Does a larger down payment increase how much I can afford? +
Yes. A larger down payment reduces the loan amount and monthly payment, freeing up room in your DTI ratio and allowing you to qualify for a higher purchase price. It also eliminates PMI at 20% down.
What debts are included in the DTI calculation? +
Back-end DTI includes recurring minimum debt payments: car loans, student loans, credit card minimums, personal loans, child support, and alimony. It does not include utilities, groceries, or subscriptions.
Is this calculator the same as a pre-approval? +
No. This provides an estimate based on general guidelines. A pre-approval from a lender involves a credit check, income verification, and asset documentation, giving you a firm borrowing limit. Call James at (586) 722-8800 to get started.

This calculator provides estimates for informational purposes only. Actual qualification amounts, rates, and terms vary by credit profile, loan type, and lender. For accurate numbers, contact James Taveggia at (586) 722-8800 or jtaveggia@uhm.com. NMLS #23433. Equal Housing Opportunity.