What lenders typically look at
Lenders often evaluate housing costs and total debts as a percentage of gross monthly income — known as housing and total debt-to-income (DTI) ratios. Different loan programs have different thresholds.
What you should look at
A payment that fits a guideline can still feel tight in real life. Add reserves, savings goals, and lifestyle considerations to the picture before deciding what feels affordable for the long term.
Common ongoing costs
Property taxes, homeowners insurance, possible PMI, HOA dues, and ongoing maintenance all add to the cost of ownership. Including them in your view of affordability is more realistic than focusing on principal and interest alone.
Key takeaways
- Housing and total DTI ratios shape what lenders may approve.
- Personal comfort and reserves matter too.
- Include taxes, insurance, PMI, HOA, and maintenance in your view of affordability.
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Get startedEducational content only. Not a commitment to lend or financial advice. Eligibility, rates, and terms vary by lender and borrower profile.