What price home can I afford?

As a “rule of thumb” you can afford to buy a home equal in price to twice your gross annual income. More precisely, the price you can afford to pay for a home will depend on six factors:
  1. Your income
  2. The amount of cash you have available for the down payment, closing costs and cash reserves required by the lender.
  3. Your outstanding debts
  4. Your credit history
  5. The type of mortgage you select
  6. Current interest rates
Your housing income-to-expense ratio should fall in the 28 to 33 percent range. Some lenders will go higher under certain circumstances. Your total income-to-debt ratio should not exceed 34 to 38 percent of your gross income. Always check with your lender to verify what a lender will be willing to give you for a mortgage.