Misunderstanding The Question: “How Much House Can I Afford?”

May 29, 2019 by Dan Green

For most home buyers, the home buying journey begins with the question: “How much house can I afford to buy?”

But, there’s a better question that you should ask as a home buyer; one that puts the focus on you — and not the house.

What you really want to know is: “Which houses are affordable to me?”

A house is affordable when you can make the monthly payments, and not feel stressed about it. The home’s price matters in your budget, but other factors do, too, like the cost to insure the house, and the real estate tax due on the property each year.

It’s one of the reasons why online mortgage calculators are mostly unhelpful.

Mortgage calculators can do the math of buying a house and work a formula to come up with a price range for you, but they can’t say, “buy a house for x dollars and everything will work out great.

Mortgage calculators don’t give consideration to your budget, your life, or even what your lender will approve for you. Those are the human aspects of buying a home.

The human in you wants to know:

  • Can I pay for this house and also pay my bills each month?
  • When something breaks, will I have enough savings to fix it?
  • How should I strategize for my down payment?

These are real questions every buyer should consider, and it’s always good to engage with a pro when you’re ready.

Think differently about home affordability. Your monthly payments matter. Your purchase price does not.

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