“How much home can I afford?” Many prospective home buyers grapple with this question. A good rule of thumb is to devote no more than 28%-33% of your monthly gross income to housing, which would include mortgage payment, insurance and taxes. Another way to look at it – your monthly gross income should be at least three times your total monthly housing costs.
So for example – if your monthly housing costs are $1500 – ideally your monthly gross income should be at least $4500.
Follow these simple guidelines when trying to decide your maximum purchase price.