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How much can I spend on a house?
How do I figure out how much I can really spend on a house? I got pre-approved for an amount that seems like way too much money. I can put 20% towards a down payment. And I am afraid that if I spend the pre-approved amount that I won't be able to make my monthly payments. So, how do I figure out home much I can really spend on a house?
Asked By Emma | Boston, MA | 268 views | Buying | 4 months ago
Answer(4)
Julianne Clark | Your Lowcountry Compass
Charter One Realty
You need to contact a mortgage lender to answer these questions. They will ask you questions about your financial situation, employment, credit and income. Afterward -- you will have a better idea if and what you can afford. There is not fee for this service. If you do not want to talk to a person -- I would imagine there are some websites to help with determining preapproval amount and online lenders as a starting point. At some point you will need to make that phone call.
- 4 months ago
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Getting pre-approved doesn’t mean you should spend the full amount. Lenders calculate what you can afford, not what’s comfortable. To figure out what you can really spend, start with your monthly budget and decide what payment feels manageable — including taxes, insurance, and maintenance.
Aim to keep housing costs under 30% of your gross income, even if you’re putting 20% down. Use a mortgage calculator or ask your lender to match a purchase price to your ideal monthly payment.
The key is: Buy based on your lifestyle, not the bank’s limit.
Would you like help estimating what price point matches your ideal monthly payment?
- 2 months ago
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Rachel Warren
Remerica United Realty-Brighton
The best way to know is to talk to a local lender to help you determine the best purchase price for your budget, Since this is based on a number of factors, they are best equipped to assist you with this.
- 4 months ago
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Stewart Woodward
Real
When determining how much you can truly afford for a home, look beyond your pre-approval amount and focus on your monthly budget. Financial experts recommend that your monthly mortgage payment should not exceed 25-30% of your take-home pay, which includes principal, interest, property taxes, and homeowners insurance. Consider your other monthly expenses like utilities, car payments, groceries, and savings goals to ensure you're comfortable with the potential mortgage payment. The best first step is to contact a lender or mortgage broker to discuss your specific financial situation, as they can provide personalized guidance tailored to your unique circumstances and help you make the most informed decision. I hope this information is helpful in your home-buying journey!
- 4 weeks ago
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