You can use Zillow's Affordability Calculator to estimate how much house you can afford based on your financial situation. Here's how it works:
- Enter your annual income (before taxes), including any income from a co-borrower if applicable.
- Input your monthly debts such as car payments, credit card minimum payments, student loans, and other recurring expenses.
- Specify your down payment amount.
- Include other costs like property taxes, homeowner's insurance, and HOA dues if applicable.
- The calculator also considers the mortgage interest rate and loan term to estimate your monthly mortgage payment.
- It uses your debt-to-income (DTI) ratio to determine affordability, generally aiming for monthly mortgage costs to be no more than 36% of your gross monthly income, and total monthly debt (including mortgage) to be no more than 43% of your income.
The tool provides a customized estimate of the maximum home price you can afford comfortably, helping you set a sensible housing budget. You can also get pre-qualified for a mortgage through Zillow Home Loans to get a more precise figure based on your credit and financial profile. Zillow's calculator includes advanced options to adjust for taxes, insurance, PMI, and HOA fees, giving you a comprehensive view of your potential monthly payment and affordability
. In summary, by entering your income, debts, down payment, and other expenses into Zillow's affordability calculator, you can find out how much house you can afford to buy without stretching your finances too thin
