Can I afford a $500,000 house?

These are questions you should be discussing with the Lender that pre-approved you. You do not want to get into a house poor situation! If your lender is not willing to discuss home buying costs and how it will affect your finances -- you need to find another one. Home purchasing is a long-term investment should be entered into only when you are ready and informed on expectations and expenses.

f you are already questioning whether you can afford the $500K home then the answer is probably no. Pre-approval only takes into account income credit and certain bills. It does not factor in things like travel shopping dining out or lifestyle choices. The bank may say you qualify but that does not mean it will be comfortable for you. If you are already unsure it is a sign you should look at a lower price point or run the numbers more closely before making the leap.

To see if you can afford a $500,000 house:

1. Down Payment: 20% ($100,000).
2. Loan Amount: $400,000.
3. Monthly Mortgage: About $1,900 for a 30-year loan at 4% interest, plus property taxes, insurance, and PMI.
4. Total Costs: Estimate $2,500–$3,000/month for mortgage, taxes, and insurance.
5. DTI: Ensure your total monthly debt (mortgage + other expenses) is below 36-43% of your gross income.

Make sure the total monthly costs fit comfortably within your budget.