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I know there is a formula for it but I can’t seem to figure it out. I can’t remember if it is a percentage you base things on or if there is an equation you do. I just want to get a general idea of how much house I can afford to buy right now.
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To get a general idea, use this:
https://www.realtor.com/mortgage/tools/affordability-calculator/A good rule of thumb is to not go over 1 week’s pay in mortgage cost. Say you make $3,200 a month. Divided by 4, this gives you $800. That would be a wise number to stay under. This does not include property tax, utilities, or house insurance.
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The easiest way to do this is to look at your yearly income and times it by four. If you earn $40k a year, you can safely afford $160k house. There is wiggle room with this but it is a realistic price range you should aim for. In order to buy a $250k house, you would need to be earning roughly $62k a year.
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