Question 1

What is the 28/36 rule for mortgages?

Accepted Answer

The 28/36 rule is a guideline lenders use. Your monthly housing costs (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income, and your total debt payments (housing + car loans + student loans + credit cards) should not exceed 36% of gross income. This calculator uses the 28% rule for the front-end ratio.

Question 2

How much house can I afford on a $100,000 salary?

Accepted Answer

On a $100,000 salary with the 28% rule, your maximum monthly housing payment would be about $2,333. With a 30-year loan at 6.5% interest and 20% down, this could afford roughly a $350,000-$400,000 home, depending on property taxes and insurance in your area. Use this calculator with your specific numbers for an accurate estimate.

Question 3

What costs are included in a monthly mortgage payment?

Accepted Answer

A full monthly mortgage payment (often called PITI) includes Principal (paying down the loan), Interest (the cost of borrowing), property Taxes (typically 0.5-2.5% of home value annually), and homeowners Insurance ($1,000-$3,000+ per year). If your down payment is less than 20%, you'll also pay PMI (private mortgage insurance), adding 0.5-1% of the loan value annually.

Strategy	Potential Impact
Improve your credit score before applying	0.5-1.5% lower interest rate
Save for a 20% down payment	Eliminates PMI ($100-300/mo savings)
Get pre-approved from multiple lenders	Better rates through competition
Factor in all costs (taxes, insurance, HOA, maintenance)	Avoids being house-poor
Keep total housing under 28% of gross income	Financial breathing room for other goals

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