Ask a room of buyers how much house they can afford and you will get one confident number — usually the biggest one a lender ever said out loud. There are really two numbers, and they rarely match. The first is the lender’s ceiling: the most a loan program will approve, set by your debt-to-income ratio. The second is your own budget’s number: the payment that still leaves room for taxes, insurance, upkeep, and a life. Buy at the second number and the house is comfortable; buy at the first and the house owns the budget. Here is the arithmetic behind both.
Start with the guideline lenders and planners have used for decades, the 28/36 frame. Housing costs — principal, interest, property taxes, homeowners insurance, and HOA dues where they apply — at or under 28% of gross monthly income. All monthly debts together, housing included, at or under 36%. It is a guideline, not a law, and loan programs approve well past it: automated approvals on conventional loans commonly run into the mid-to-high 40s as a back-end ratio, and FHA files can go higher with compensating factors. That gap is the whole point of this page — approval measures the lender’s risk, not your comfort. One labeled example: on $72,000 a year ($6,000 a month gross), the 28% line is a $1,680 housing payment and the 36% line is $2,160 for all debts; with $400 a month in car and card payments, the back-end line leaves $1,760 — so the $1,680 front-end number is the one that binds.
The ratio itself is simple division. Front-end: the full monthly housing payment — principal and interest, taxes, insurance, mortgage insurance where it applies, and HOA dues — divided by gross monthly income. Back-end: that housing payment plus every other monthly debt payment on the credit file — auto loans, student loans, credit-card minimum payments, other installment debts, and court-ordered support — divided by the same gross income. What is not in it matters as much: utilities, groceries, gas, and ordinary living costs never enter the lender’s ratio, which is one more reason an approval can exceed a sane budget. Income is the lender’s documented version, too — stable salary counts at face value, while bonus, commission, and self-employment income are averaged over history and, for the self-employed, read from tax returns after deductions.
Four levers move the answer, and a buyer controls three of them. The price is the obvious one. The down payment cuts the loan itself and, at 20%, removes private mortgage insurance from the payment entirely. The rate reprices every dollar borrowed — the same loan at a point higher costs meaningfully more each month, which is why the price that fits at one rate may not fit at another. And existing debts are the quiet lever: under a back-end cap, every $100 a month of car or card payment removed is up to $100 a month of housing payment the ratio allows — paying a small loan off entirely often buys more house than the same dollars added to the down payment. Run the levers in that order before you run them on a house.
Four moves, in order. Do the two-ratio arithmetic on your real numbers — gross income, the debts on your credit file, and a tax-and-insurance estimate for the area you are buying in, not a national average. Get a lender’s preapproval when you are genuinely shopping: it converts the estimate into a documented number and tells you which program’s ratio cap your file was read under. Then shop at your budget’s number, not the approval’s — the difference is your margin for the costs no ratio counts. And re-run the arithmetic whenever a lever moves: a rate shift, a paid-off loan, or a bigger down payment changes the answer, and a file protected between preapproval and closing — no new debts, no unexplained deposits — keeps the answer from moving against you.
Homeowner HQ does not calculate your affordability, preapprove you, or lend — a lender’s documented preapproval is the only approval that exists, and any page or calculator claiming to know your number without your full file is estimating, including this one. What HQ keeps straight is the other half of the file: the home itself. A loan is underwritten against a borrower and a property, and the property half — value, equity, the facts about the home — is the record your own agent keeps current for you here, so the number a lender appraises against is built on facts you have already corrected.
Your own agent sends a monthly value update from Homeowner HQ — the estimate, labeled as an estimate, with your equity beside it — and HQ runs on Amazon AWS. For a buyer, that record is where the affordability answer lands: the payment you chose on purpose becomes the loan on the record, and the tracked value and the shrinking balance are what it builds from there. When a purchase closes, file the settlement statement against the tracked record, and correct any fact about the home in HQ with your own agent the same week, so the home you track stays the home on paper.
Homeowners are always free. Realtors pay $25/mo to join and lenders join at the $5/mo founding rate, at any book size, with no setup fee; sending messages inside HQ is a $100/mo unlock ($125/mo total for realtors, $105/mo total for lenders). A lender-sponsored realtor joins for $0.
Homeowner HQ is an AI-powered marketing department for agents and lenders — a relationship and revenue engine, not a homeowner database. A homeowner's record routes them back to their own agent; it is never sold and never shown to lenders.