Purchasing a home is one of the most significant investments you will make in your lifetime.
How much house you can afford to buy depends on various factors, including your income, the size of your down payment, any existing outstanding debts, and your mortgage interest rate.
Here are the five key factors you should consider when determining how much house you can afford.
The first step in calculating how much house you can afford is determining the size of your down payment on the house.
There are several types of mortgages, including 30-year fixed-rate loans, 15-year fixed-rate loans, and adjustable-rate mortgages.
The next step in calculating how much house you can afford is to figure out your debt-to-income ratio (DTI).
A debt-to-income ratio greater than 36% is considered high-risk for lenders and may make it difficult for you to get the best interest rate.