How Much House Can I Afford?

On a $50,000 salary with no debts and a 20% down payment, you can typically afford a home around $200,000–$250,000 depending on interest rates and property taxes. With a 6.75% rate, your maximum monthly payment would be about $1,167 (28% of $4,167 monthly gross).

The 28/36 rule means your total housing costs (mortgage, taxes, insurance) shouldn't exceed 28% of your gross monthly income, and your total debt payments (housing + car + student loans + credit cards) shouldn't exceed 36%. Most lenders use this as a baseline qualification guideline.

A 20% down payment avoids PMI and gets better rates, but isn't required. Conventional loans allow 3–5% down. FHA loans need 3.5%. VA and USDA loans offer 0% down for eligible buyers. Even 10% down significantly reduces your PMI cost.

Minimum scores: Conventional 620+, FHA 580+ (3.5% down) or 500+ (10% down), VA no minimum (most lenders want 620+). Every 20-point increase can save 0.125–0.5% on your rate, which translates to thousands over the life of the loan.

Enormously. Property tax rates range from 0.28% (Hawaii) to 2.47% (New Jersey). On a $300,000 home, that's the difference between $70/month and $617/month. Higher tax states reduce your maximum home price because lenders count taxes in your DTI ratio.

PMI (Private Mortgage Insurance) is required when your down payment is less than 20%. It typically costs 0.3–1.5% of the loan amount per year. You can avoid it by putting 20% down, using a VA loan, or requesting removal once you reach 20% equity.