Common questions answered directly.
A common rule of thumb is 2.5-3x your annual gross income as a maximum home price. At a $100,000 salary, that's $250,000-$300,000. But this ignores your existing debts, down payment, local property taxes, and current mortgage rates — all of which significantly affect the real answer. Use the calculator for a more precise number.
Most conventional mortgages require a back-end DTI (all monthly debts including the new mortgage) below 43%. FHA loans allow up to 50% with compensating factors. Many lenders prefer under 36%. The lower your DTI, the better your rate options and approval odds.
The minimum is typically 3-3.5% for conventional and FHA loans, though you'll pay PMI (Private Mortgage Insurance) until you reach 20% equity. 20% down avoids PMI. More down means a smaller loan, lower monthly payment, and more equity from day one.
Minimum: 580 for FHA loans (3.5% down), 620 for most conventional loans. For the best mortgage rates, aim for 740+. A higher score can save thousands in interest over the loan's life.
Almost always no. Lenders approve you for the maximum they're legally allowed to lend based on your debt ratios — not based on what leaves you comfortable financially. The maximum approval doesn't account for retirement savings, emergency fund, childcare, lifestyle, or future income variability.
Use the home affordability calculator — free, no email required.