House Affordability Calculator: How Much Home Can You Afford?

• Front-End Ratio:
  The percentage of your gross monthly income spent on housing costs (mortgage, taxes, insurance, HOA).
  Formula: (Monthly housing costs ÷ Monthly gross income) × 100%

• Back-End Ratio:
  The percentage of your gross monthly income spent on all debts, including housing, car loans, student loans, and credit cards.
  Formula: (Monthly housing costs + other monthly debts) ÷ Monthly gross income × 100%

Common Loan Types and DTI Rules:

• Conventional Loans (28/36 Rule):
  Spend no more than 28% of income on housing and 36% on total debts.

• FHA Loans (31/43 Rule):
  Housing costs ≤ 31% of income; total debts ≤ 43%. FHA loans require mortgage insurance.

• VA Loans:
  Total debts should not exceed 41% of income. VA loans are for veterans and do not require a front-end ratio.

Custom DTI Ratios:
You can select DTI ratios from 10% to 50% in the calculator. Lower DTI means safer, more affordable payments; higher DTI is riskier.

Tips to Improve Affordability:

• Pay down other debts
• Increase your credit score
• Make a larger down payment
• Save more before buying
• Increase your income

If you can’t afford your desired home now, consider less expensive options, renting, or local assistance programs until you’re ready.