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How Much House Can You Afford?
Dated: July 1 2025
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How Much House Can You Afford?
Smart tips to help you avoid becoming “house poor”
Shopping for a home is exciting—but figuring out what you can realistically afford can feel overwhelming. It's easy to fall in love with a house that's just out of reach or get caught up in the idea of “buying big.” But there’s one thing many buyers overlook that makes all the difference: staying financially balanced.
At the Denise Payne Real Estate Team, we believe your home should bring joy and security—not stress. That’s why we help buyers take a thoughtful look at their finances before making an offer, so you don’t end up what’s known as “house poor.”
What does it mean to be house poor?
It means your mortgage, taxes, insurance and home maintenance costs take up such a large portion of your income that there’s little left for savings, travel, hobbies, emergencies—or simply enjoying life. It’s a situation that can feel overwhelming, especially if unexpected expenses come up.
So how do you figure out what you can truly afford?
A good rule of thumb is to spend no more than 28–30% of your gross monthly income on housing. That includes your mortgage payment, property taxes, homeowners insurance and any HOA fees. If you're adding in other debts (like student loans or car payments), aim to keep all of your monthly obligations under 40–43% of your gross income. This is typically what lenders look at when determining how much to approve you for.
Here’s a simple way to estimate your range:
Take your monthly gross income (before taxes), multiply it by 0.28, and use that number as a ballpark for your maximum monthly housing budget.
Example: If you earn $5,000 a month, 28% would be $1,400.
That $1,400 needs to cover your mortgage payment and other housing costs like taxes and insurance.
But numbers alone don’t tell the full story. Ask yourself:
Do I want room in my budget for travel, hobbies or savings?
Am I planning for childcare, tuition or a career change?
What if property taxes rise or interest rates fluctuate?
Being honest about your lifestyle and long-term goals is just as important as crunching numbers. It’s about building a life, not just buying a house.
Still not sure what’s right for you? You don’t have to figure it all out alone.
A trusted lender can help you review your income, credit, debt and savings to give you a clear picture of what’s doable—without stretching too thin. And at the Denise Payne Real Estate Team, we’re happy to connect you with experienced professionals who will guide you through that step with honesty and care.
Whether you're months away from buying or ready to start touring homes this weekend, we’re here to help you find the right fit—for your budget, your goals and your lifestyle.
Your dream home should fit more than just your taste—it should fit your life.
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All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. The data relating
All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. The data relating
All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. The data relating
