Knowledge Hub · 20 pages

💰Affordability

What you can actually buy — on your income, with your debts.

“How much house can I afford?”

Overview

Affordability isn't one number — it's the interaction of income, monthly debt, down payment, loan program, and local taxes and insurance. Change any one and your price ceiling moves by tens of thousands.

Everything here answers one question from a different angle: what price can you carry without wrecking your life? Start with your income, then subtract what your debts cost you.

Start hereHow much house can I afford?The lender-grade version of the affordability math — front-end vs back-end DTI, and what actually caps you.Read it

Learning path

The right order for this topic.

Can I afford it?

How much house can I afford?The full affordability framework.DTI explained: front-end vs back-endThe ratio that decides your ceiling.

By income

Real price ranges at real salaries.

Can I afford a home making $50,000 a year?A realistic look at the price range, monthly payment, and loan program a $50K salary actually supports in 2026.7 min read Can I afford a home making $75,000 a year?The real 2026 answer on price range, monthly payment, and loan programs for a $75K household income.7 min read Can I afford a home making $100,000 a year?A $100K salary opens most of the market — here's the price range, monthly payment, and program pick that actually fits.8 min read Can I afford a home making $150,000 a year?At $150K, the question shifts from 'can I' to 'should I' — here's how to size the right payment and pick the smartest program.8 min read How much income do I need to buy a $400,000 house?Working backwards from a $400K purchase price to the salary, monthly payment, and cash-to-close it actually requires.7 min read How much income do I need to buy a $600,000 house?The salary, monthly payment, and cash reserves a $600K purchase actually requires in 2026.8 min read

Down payment

3% to 20% — what each option really costs.

How much down payment do I really need?The 20% rule is a myth. Here's what each program actually requires — and what it costs you to put less down.7 min read Can gift funds be used for a down payment?Yes — but the documentation and source rules are strict. Here's exactly how to receive and document a gift.6 min read Down payment assistance (DPA): what it is and how to use itThere are 2,000+ down-payment-assistance programs in the US. Most buyers who qualify never apply. Here's the map.7 min read Buying a home with 3% downConventional 97, HomeReady, and Home Possible let first-time buyers put just 3% down. Here's how each works.6 min read Buying a home with 5% down5% down is the sweet spot for most buyers — better PMI than 3%, no depletion of savings like 20%. Here's the math.6 min read Buying a home with 20% down20% down eliminates PMI and unlocks the best rate. Here's when it's worth it — and when it isn't.6 min read PMI vs a larger down payment: which wins?The tradeoff is real — and depends on your credit, market, and alternative uses of cash. Here's the math.6 min read

Calculators

Affordability CalculatorYour max price by income, debts, and program.Mortgage Payment CalculatorPITI with taxes, insurance, and MI.DTI CalculatorFront-end and back-end in one pass.Closing Costs CalculatorCash to close, itemized.Rent vs Buy CalculatorBreak-even horizon on buying.

Comparisons

PMI, explainedWhat mortgage insurance costs and when it drops.DTI, explainedThe single most misunderstood number in lending.PMI vs a larger down paymentWhich one actually costs less.

Frequently asked questions

What percentage of income should go to a mortgage?

Conservative underwriting targets 28% of gross income for housing and 36% for total debt. FHA allows up to roughly 56.9% total debt with compensating factors — but affordable and approvable are not the same thing.

Does a car payment really change how much house I can buy?

Yes. Roughly every $100/month of debt payment cuts about $15,000–$18,000 off your maximum purchase price at current rates.

Should I put 20% down?

Only if you have it and still keep reserves. 20% avoids mortgage insurance, but 3%–5% down with PMI often gets you into the market years earlier, and PMI drops off conventional loans at 80% LTV.

Ask RED about affordability

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