What price should I actually be shopping at?
How much house can I afford?
This runs the payment math backwards: from your income, your existing debts and your cash to a purchase price. It solves against a back-end debt-to-income ratio the way an underwriter does, and it tells you which of the two constraints — income or cash — is the one holding you back.
That second output is the useful one. If cash is the limiter, a seller concession changes your answer. If income is the limiter, paying off one car loan might.
Cars, student loans, credit card minimums, child support
43–50% is typical
Working estimate
$250,000
Roughly the purchase price this profile supports on a 30-year loan, after reserving part of the housing budget for taxes, insurance and mortgage insurance.
- Total housing budget
- $2,725/mo
- Supportable loan amount
- $327,504
- Currently limited by
- Cash to close
A real pre-approval also weighs credit score, employment history, reserves and the property itself — this is a starting point for the conversation, not an approval.
Find your real ceiling
Fifteen minutes on the phone gets you a documented number instead of an estimate, plus an honest opinion about the difference between what you can borrow and what you should.
What it accounts for
- Your gross monthly income before tax
- Every monthly debt payment on your credit report — cars, student loans, card minimums, support obligations
- The cash you can actually bring, which has to cover both down payment and closing costs
- A maximum debt-to-income ratio you can adjust; 43 to 50 percent is the usual working range
What it cannot know
- It reserves part of your housing budget for taxes, insurance and mortgage insurance so the price survives contact with a real escrow account — which makes it more conservative than the maximum an automated underwriting system might allow.
- It does not know your credit score, and score changes both eligibility and pricing.
- Your maximum approval and your sensible budget are usually two different numbers. This gives you the first one.
Questions
About this calculation
No. A pre-approval means credit was pulled, income and assets were documented and the file went through automated underwriting. This is arithmetic on numbers you typed. Useful for planning, worth nothing in an offer.
Start at 45 percent. Automated underwriting will stretch beyond that with strong compensating factors like reserves or a large down payment, and it will hold you tighter with thin credit.
Almost nobody should. The maximum assumes nothing changes — no escrow increase, no HVAC failure, no reduction in hours. Leave yourself room.
Output is an estimate for illustration and planning only, based on the figures you enter. It is not an offer of credit, a rate quote or a commitment to lend, and mortgage insurance figures are illustrative rather than quoted premiums. This is not an offer to enter into an agreement or a commitment to lend. Not all applicants will qualify. Information and rates are subject to change without notice. All loans are subject to credit review and approval. Fairway Home Mortgage is a division of Fairway Independent Mortgage Corporation. NMLS Entity ID #2289.
Next step
Numbers you can actually make an offer with.
A pre-approval takes about 24 hours from a complete document set and costs nothing. It replaces every estimate here with a figure a listing agent will take seriously.