How much house can I afford?

Lenders use two primary debt-to-income (DTI) ratios. The front-end ratio: your monthly housing costs (principal, interest, taxes, insurance — PITI) should generally not exceed 28% of your gross monthly income. The back-end ratio: all monthly debt payments (including housing) should not exceed 43% of gross income (some lenders allow up to 50% for well-qualified borrowers). Beyond lender limits, a useful rule of thumb is to spend no more than 2.5–3× your annual gross income on a home purchase. Do not forget to factor in the down payment (at least 20% to avoid PMI), closing costs (2–5% of the purchase price), moving expenses, and an ongoing maintenance budget (1–2% of home value per year). Model your full picture at wealthserene.com/tools/home-affordability.