How can I figure out if I can afford to buy a home and take out a mortgage?


Focus on a mortgage that is affordable for you given your other priorities, not how much you qualify for.

Lenders will often tell you how much you are qualified to borrow – that is, how much they are willing to loan you. Several online calculators will compare your income and debts and come up with similar answers based on standard ratios. But how much you could borrow is very different from how much you can afford to repay without stretching your budget for other important items too thin. Lenders do not take into account all your family and financial circumstances.

To know how much you can afford to repay, you’ll need to take a hard look at your family’s income, expenses and savings priorities to see what fits comfortably within your budget. Also, remember that your monthly payment could change in the future, depending on what type of mortgage loan you have. Consider how future, higher mortgage payments will fit in with your budget.





Was this page helpful to you?

Note: Do not include sensitive information like your name, contact information, account number, or social security number in this field.

The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The CFPB updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.

Read full answer Hide full answer