Your monthly housing costs—including principal, interest, taxes, and insurance (PITI)—should not exceed 28% of your gross monthly income.
Your total monthly debt payments (housing costs + car loans, student loans, credit cards) should not exceed 36% of your gross monthly income. 3. The 30/30/3 Rule (Conservative Safety Net) how expensive of a house can i buy
To work backward from a comfortable monthly payment to a purchase price: Example: If you want to pay $2,400 a month: home price. Practical Steps to Calculate on Paper: What is the 30/30/3 Rule for Home Buying? Your monthly housing costs—including principal
If you earn $100,000, your target home price is $300,000. your target home price is $300
Lenders use these percentages to determine your ratio.
Developed to ensure you aren't "house poor," this rule adds a savings requirement: