House Affordability Calculator

They are the two qualifying ratios lenders apply to your gross monthly income. FDIC Money Smart states them plainly: housing costs — principal, interest, taxes and insurance — should be no more than 25% to 28% of gross monthly income, and housing plus long-term debt no more than 33% to 36%. The first is the front-end ratio, the second the back-end ratio. Both are computed, and whichever allows the smaller housing payment is the one that decides your price.

It depends entirely on your other debts. With no car payment, no card balance and no student loan, 36% minus nothing leaves more room than 28%, so the front-end ratio binds. Each dollar of monthly debt payment eats a dollar of back-end room, and at roughly 8% of gross income in other payments the back-end ratio takes over. From that point on, paying off a car loan buys you more house than saving the same amount in cash.

The CFPB defines debt-to-income as all your monthly debt payments divided by gross monthly income. In practice that means car loans and leases, credit-card minimums, student loans, personal loans, and court-ordered alimony or child support. It does not mean utilities, groceries, phone bills, insurance premiums or the money you put into savings — those matter to your budget but they are not debts, and an underwriter will not count them.

Because that is what the ratios are defined against. The CFPB describes gross monthly income as the money you earned before your taxes and other deductions are taken out. Using net pay would understate the number a lender computes and give you a price no lender would quote. Whether the resulting payment is comfortable on your actual take-home pay is a separate — and far more important — question.

Often, yes. Fannie Mae sets 36% as its maximum total debt-to-income ratio for manually underwritten loans but allows up to 45% when the borrower meets credit-score and reserve requirements, and up to 50% through Desktop Underwriter. Raise the back-end ratio field to model the programme you are actually applying to. Qualifying at 45% and living at 45% are not the same thing.

Because the tax scales with the house. The price is what we are solving for, so a fixed dollar figure would have to be guessed from an answer you do not have yet. Entering an effective rate lets the tax, the payment and the price be solved together in one equation. Your county assessor publishes the effective rate for your area; typical US rates run from roughly 0.3% to over 2%.

No. The down payment you enter is treated purely as money that reduces the loan. Closing costs — origination, appraisal, title, prepaid interest and the initial escrow deposit — are separate cash you need at the table on top of the down payment, and lenders will also want to see reserves left over afterwards. Subtract them from your savings before you enter a down payment here.

No. It is the arithmetic a lender starts from, not the decision a lender makes. Real underwriting also weighs your credit score, employment history, the stability and documentation of your income, your cash reserves, the appraisal and the loan programme. Use this to know roughly which price bracket to shop in, then get an actual pre-approval before you make an offer.