Calculate Home Buying Power May 2026

Multiply gross income by 0.36 (36%) and subtract existing monthly debts.

Buying power is the maximum amount you can spend on a home based on your financial profile. It combines your available for a down payment with the maximum loan a lender will grant you. 🏗️ The 3 Pillars of Buying Power 1. The 28/36 Rule Lenders typically follow these debt-to-income (DTI) ratios: calculate home buying power

The "gold standard" to avoid Private Mortgage Insurance (PMI). 3. Credit Score & Interest Rates Multiply gross income by 0

Result in higher rates, which raises your monthly payment and lowers the total house price you can afford. 🧮 How to Calculate Your Power To get a realistic number, follow these steps: Step 1: Determine Monthly Income Take your annual salary and divide by 12. Example: $100,000 / 12 = $8,333/month Step 2: Apply the DTI Limit 🏗️ The 3 Pillars of Buying Power 1

Example: $308,000 (Loan) + $50,000 (Cash) = ⚠️ Important Considerations

Keep 1%–3% of the home's value in savings for annual repairs.