The Buyer's Guide: Understanding Affordability
Buying a home is the largest financial transaction most people will ever make. The single most common mistake is touring houses without knowing what a bank will actually lend you. The 28/36 Rule is the industry standard for mortgage approval.
The 28/36 Rule
- 28% (Front-End): Your mortgage payment should not exceed 28% of your gross monthly income.
- 36% (Back-End): Your total monthly debt (mortgage + car/student loans) should not exceed 36% of your income.