To determine how much house you can afford, you must balance what a lender is willing to give you with what your lifestyle can actually sustain. While banks often use a of up to 43% to 45%, financial experts typically recommend much stricter limits to avoid being "house poor". 1. Apply the 28/36 Rule The 28/36 rule is the gold standard for home affordability.

Your total monthly debt payments—housing costs plus car loans, student loans, and credit cards—should not exceed 36% of your gross monthly income. 2. Factor in Upfront Costs

Your total monthly housing costs—including principal, interest, taxes, insurance (PITI), and HOA fees—should not exceed 28% of your gross (pre-tax) monthly income.

Your total budget isn't just the sticker price; you need liquid cash for several immediate expenses. Buying a home – what mortgage can I afford? - MoneyHelper