How much can you afford?

Finding a home at the right price can have big benefits for your financial future. The first step is finding out how much you can reasonably afford without putting your other financial goals at risk.

A good rule of thumb is the 28/36 method. First, calculate your gross income (pre-tax) for the year. Then, multiply that figure by .28 to find 28%. That number is the max you should spend on housing. Next, find 36% by multiplying your gross income by .36. That figure is your maximum spend on recurring debt—things like car loans, student loans, and credit cards.

If you stick to this strategy, you will be left with about 36% of your income left for basics such as groceries and transportation as well as savings, fun money, and more.

Buying a new home is exciting, and it should provide you with a sense of stability and financial security. With hard work and careful planning, there’s a good chance you can reach all your financial goals.

If you’re ready to explore your options, get in touch with a Loan Officer in your area today.



About these results

  • Closing costs: Home financing generally requires closings costs that total 3%-5% of the loan amount. These costs were not calculated into these results.
  • Mortgage Insurance: Sometimes referred to as private mortgage insurance (PMI), this type of insurance is typically required when your down payment is less than 20% of the value of your home. The cost of mortgage insurance can vary; we have assumed a rate of 0.5% of the original loan amount.
  • Mortgage type: No loan type is presumed in these calculators. The type of mortgage you choose can have a dramatic impact on the amount of house you can afford, especially if you have limited savings. 
These calculations do not reflect all costs of homeownership and are for example purposes only. Actual amounts and interest rate options may vary. This is not a commitment to make a loan. Not all who apply will qualify. Loans are subject to borrower and property qualifications. Contact a Castle & Cooke Mortgage Loan Officer for an accurate, personalized quote.

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