HOW MUCH HOUSE YOU CAN AFFORD

1 May 2023

Watch on YouTube

Short how-to from a 2023 YouTube video (Neel Dhingra) that shows a quick calculation to estimate the affordable monthly house payment: multiply gross monthly income by 0.48, then subtract monthly debt payments (credit cards, auto loans). The result is the monthly house payment the viewer can afford; if insufficient, the speaker advises increasing income or obtaining a cosigner.

So doing this one thing will help you know how much of a home you can buy in 2023? Go ahead and list out your gross monthly income. This is the total figure before any taxes get taken out. Take that figure and multiply it by 0.48. Now you're going to list and subtract any debts that you have. Think of credit cards, auto loans. Use the monthly payment that's on your last statement. The remaining figure is how much of a house payment you could afford in your market. If that figure is enough to buy a home, go ahead and start the process. If it's not, you need to make more income or get a cosigner.