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SmartMoney podcast: ‘How Much House Can I Afford?’

Oct. 21, 2019
Personal Finance
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Welcome to NerdWallet’s SmartMoney podcast, where we answer your real-world money questions — in 15 minutes or less.



This week’s question is from Steve in Denver. He asks: “I’m looking to buy a house in the next year, but I’m not sure what I can afford. How can I know how much house I can afford?”

Our tips

Know your housing budget. When sorting out how much house you can afford, aim to keep all debt payments — including a mortgage — within 36% of your pre-tax income.

Can’t come up with a 20% down payment? You don’t need to. mortgage insurance as a trade-off, you can get away with putting as little as 3% down.

Even if you have the cash, ask if you’re emotionally prepared for homeownership. Having a home can be rewarding, but it’s a lot of work. If you don’t want to handle maintenance or don’t think you’ll stay in your house for at least three years, you might be better off renting.

Know how much your home is worth?

NerdWallet can show you what your home is worth and update you on changes over time.

More about homebuying on NerdWallet

Tips for first-time home buyers

First-time home buyer mistakes and how to avoid them

Why debt-to-income matters when you get a mortgage

Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear previous episodes, visit the podcast homepage.

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