This handy widget can give you a rough idea of what you might be able to qualify for. This is an estimate! You’ll need to reach out to a lender to to confirm. Also the monthly payment needs to make sense for your budget above all else.
Income to Debt Ratio Will Dictate How Much You Can Borrow.
To calculate your debt-to-income ratio, you add up all your monthly debt payments like student loans, credit card payments, car loan, etc., and then divide them by your pre-tax monthly income. If you pay rent on a place that you’ll be leaving when you buy, do not include it as a debt.
For example, if you pay $1500 a month for your mortgage and another $100 a month for an auto loan and $400 a month for the rest of your debts, your monthly debt payments are $2,000. ($1500 + $100 + $400 = $2,000.) If your gross monthly income is $6,000, then your debt-to-income ratio is 33 percent. ($2,000 is 33% of $6,000.) Source
Generally, 43% is the highest DTI ratio a borrower can have and still get qualified for a mortgage. Ideally, lenders prefer a debt-to-income ratio lower than 36%, with no more than 28% of that debt going towards servicing a mortgage or rent payment. The maximum DTI ratio varies from lender to lender, so it does make sense to shop around.
The widget above uses a 40% DTI to calculate.
This Home Loan Toolkit from the Consumer Financial Protection Bureau may be helpful as well.
Does this sounds doable? Go speak with one or a few of my recommended lenders to learn more about this process and get a pre-approval letter, and then reach out to me to schedule a consult.