October 19, 2017 | Ann Nguyen
According to Kate Williams, Ph.D, your monthly debt payments including mortgage should not be more than 45 percent of your total income. In consideration to this, the most significant factors to include when managing your monthly budget must have the following:

  • Your current debt-to-income ratio
  • Your expected income
  • Your liquid assets
  • Any work your new home will need that will add to your overall monthly costs
Normally, when finding out whether a home price is affordable or not, we use the famous  “28% rule.” The said rule maintains that your household expenses should not be above 28% of your whole income.

Deeply understanding how much property you can buy for a given monthly payment is a function of many factors including your down payment, property taxes, mortgage term, and interest rate.

Yes, tying up to 45 percent of your income in mortgage does not leave you a lot of breathing room for other things such as clothes, entertainment or savings for emergencies, food, etc. It is the reason why most mortgage advisors and financial experts recommend that home buyers keep a wise and conservative debt-to-income ratio.

With priority consideration to your budget, it’s a must to know how much you can pay in the long run and what type of mortgage payment you can normally pay back. The problem, however, is that some people do not know their limits.

How can I have my dream house then?


Anybody planning to buy a home should build up their savings. However, this is difficult for people with inconsistent monthly income. Hence, they should start on saving as soon as they start thinking about buying a house so that they'll have have enough money at closing to get the house and mortgage that they desire.
The mortgage calculator

Use the Consumer Affairs mortgage calculatorto find a realistically affordable home price, and learn the best ways to save for and buy a home.

Credits to: Kate Williams, Ph.D.
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