Some experts stretch this to 4x or 5x income if you have zero debt and a large down payment. 2. The 28/36 Rule (Standard Lender Guideline)
Your monthly housing costs—including principal, interest, taxes, and insurance (PITI)—should not exceed 28% of your gross monthly income.
Lenders use these percentages to determine your ratio. how expensive of a house can i buy
Spend no more than 30% of your gross monthly income on your mortgage payment.
Have 30% of the home price saved (20% for down payment, 10% for closing costs and an emergency buffer). Some experts stretch this to 4x or 5x
Your total monthly debt payments (housing costs + car loans, student loans, credit cards) should not exceed 36% of your gross monthly income. 3. The 30/30/3 Rule (Conservative Safety Net)
Developed to ensure you aren't "house poor," this rule adds a savings requirement: Lenders use these percentages to determine your ratio
If you earn $100,000, your target home price is $300,000.