How much house can you afford?

A lender approves the most it thinks you can repay; only you know what still leaves room for the rest of your life. Known¹

• Add up your take-home pay and your monthly bills.
• Choose a full housing payment you'd be at ease with: loan, tax, insurance, HOA and mortgage insurance.
• Plan for upkeep on top: it isn't part of the payment. Known^1,2

In the Census Bureau's 2021 survey, new owners of homes built before 1950 spent a median $3,900 a year on upkeep. Known²

Lenders look at your income, debts, savings and credit. Known³

Your debt-to-income ratio (DTI) is all your monthly debt payments divided by your gross monthly income. Lenders use it to judge whether you can manage a new payment, and each loan and lender sets its own limit. Known⁴

Closing costs, the earnest money deposit and moving add up; Freddie Mac says closing costs run 2%–5% of the loan amount. Est.Estimate⁵

• Down payment: your choice within your loan's minimum.
• Closing costs: plan on 2%–5% of the loan until a Loan Estimate shows real numbers.
• Earnest money, due within days of an accepted offer.
• A cushion for inspection, appraisal, moving and first repairs. Est.Estimate⁵

First-time buyers put down a median 10% in NAR's 2025 survey, and VA loans need no down payment. Ask lenders for your minimum. Known^6,7

You don't always need 20%. A conventional loan can go as low as 3% down on a home you'll live in, an FHA loan 3.5%, and a VA loan can need nothing down for eligible buyers. Less than 20% down usually means mortgage insurance and a bigger loan. Rule^8,9,10,11

State and city programs can cover part of your down payment, and HUD-approved counselors help at little or no cost. Known^1,12

Many programs count you as a first-time buyer if you haven't owned a home you lived in during the last 3 years, so past owners can qualify too. Your state's housing finance agency runs down-payment programs; its official page says who qualifies. Rule¹³