How Much House Can I Afford?

Front-end DTI (also called the housing ratio) measures only your housing costs — PITI (principal, interest, taxes, insurance) — as a percentage of gross monthly income. Lenders typically want this below 28%. Back-end DTI includes all monthly debt obligations: housing plus car loans, student loans, credit cards, and other recurring debts. Lenders generally cap this at 36–43%.

A 20% down payment eliminates PMI and gives you access to the best interest rates. However, many buyers put down less — conventional loans allow as little as 3%, FHA loans require 3.5%, and VA/USDA loans may offer zero down. The right amount depends on your savings, how long you plan to stay, and current market conditions. Every additional 5% down typically saves $50–$150 per month in payments.

Yes, significantly. Your credit score affects both your eligibility and your interest rate. A score of 760+ typically earns the best rates available. Improving from a 680 to a 760 score could reduce your rate by 0.5–1%, saving $100–$200 per month on a $400,000 loan. Some lenders have minimum score requirements (typically 620 for conventional, 580 for FHA), and a lower score may also mean qualifying for a smaller loan amount.