How Much House Can I Afford?

The best way to find out how much house you can afford is to talk to a lender. They must factor in your credit, your debt-to-income ratio, and more. Your best bet is to speak with a seasoned mortgage banker that comes recommended from your agent or a trusted friend/family member. The internet is ripe with traps that will sell your information to lenders looking for leads. Not all lenders are created equally and “teaser rates” can oftentimes cost you more in the end. You are looking for knowledge and partnership in a lender as they can help you structure a loan that is best for you in the long run. I would love to connect you with one of my trusted lender partners who will help you determine what price point you can start shopping for, no strings attached. Buyers are having great success in this market without as much competition out there.  

To determine how much house you can afford in Arizona, you should consider your income, expenses, and other financial obligations. A common guideline used by lenders is the 28/36 rule, which states that your housing expenses (including mortgage payments, property taxes, and insurance) should not exceed 28% of your gross monthly income, and your total debt payments (including housing expenses and other debts such as credit card payments, car loans, and student loans) should not exceed 36% of your gross monthly income.

Here’s a step-by-step process to help you determine how much house you can afford in Arizona:

1. Calculate your monthly income: Add up your monthly income from all sources, including your salary, bonuses, and any other income.
2. Determine your monthly expenses: Calculate your monthly expenses, including your rent or current housing payments, utilities, transportation costs, groceries, and other regular expenses.
3. Estimate your monthly housing costs: Use a mortgage calculator to estimate your monthly housing costs based on the price of the home, the down payment amount, the interest rate, and the term of the loan. Be sure to include property taxes and insurance in your estimate.
4. Apply the 28/36 rule: Determine if your estimated housing expenses are less than 28% of your gross monthly income, and if your total debt payments (including housing expenses and other debts) are less than 36% of your gross monthly income.
5. Consider other factors: Keep in mind that other factors, such as your credit score, the amount of your down payment, and the interest rate you qualify for, can also impact how much house you can afford.

It’s always a good idea to consult with a lender or financial advisor to get a more accurate estimate of how much house you can afford based on your individual financial situation.