If you earn $100,000, your target home price is $300,000.
To figure out how much house you can afford "on paper," you can use a few standard financial "rules of thumb" that lenders and financial advisors use to assess budget safety. 1. The 3x Annual Income Rule (Simplest) This is a quick way to find a target purchase price. how expensive of a house can i buy
To work backward from a comfortable monthly payment to a purchase price: Example: If you want to pay $2,400 a month: home price. Practical Steps to Calculate on Paper: What is the 30/30/3 Rule for Home Buying? If you earn $100,000, your target home price is $300,000
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) The 3x Annual Income Rule (Simplest) This is