An affordability calculator is a great first step to estimate how much home you can afford. But here are some other things to consider when figuring out your home shopping budget.

The 28/36 Rule for Affordability

One rule of thumb that lenders may use to assess how much of a mortgage you qualify for is the 28/36 rule. This rule says that your mortgage payment (which includes property taxes and homeowners insurance) should be no more than 28% of your pre-tax income, and your total debt (including your mortgage and other debts such as car or student loan payments) should be no more than 36% of your pre-tax income. While these numbers are used as a guide by many lenders, there are some cases where you may be able to have a higher. For example, some lenders may allow borrowers with a higher credit score to have slightly higher DTI ratios. And some loans allow for higher DTIs, such as FHA loans, which allow up to 43% or higher in some cases.