Online calculators tell you one thing; reality tells you another. Here's an honest look at how much house you can actually afford without becoming "house poor."
The 28/36 Rule
Traditional lending says housing costs shouldn't exceed 28% of gross income, and total debt shouldn't exceed 36%. On $100,000 income, that's $2,333/month for housing.
But That's Not the Full Picture
Your mortgage payment is just the start. Add:
- Property taxes: $200-$800/month depending on location
- Homeowners insurance: $100-$350/month (and rising fast)
- PMI (if less than 20% down): $100-$300/month
- Maintenance: Budget 1% of home value annually ($333/month on a $400K home)
- HOA fees: $0-$500/month
Real Affordability Example
$100K income household at 5.89% rate with 10% down:
Banks say you can afford: $450,000. Reality (including all costs): $350,000-$380,000 keeps you comfortable. The difference is $300-$500/month you'll want for savings, travel, and emergencies.
