Online affordability calculators are designed to tell you the maximum a bank will lend you. That's a terrible way to decide what to spend. Here's a more realistic approach.
The 28/36 Rule
Financial advisors use the 28/36 rule: your housing costs should be no more than 28% of your gross monthly income, and your total debt payments should be no more than 36%. But even this is aggressive for most families.
The Real-Life Test
Forget percentages. Ask yourself these questions:
- Can I make this payment every month if my car breaks down?
- Can I make this payment if I miss one paycheck?
- Will I still be able to save something — even $200/month — after this payment?
- Will I still be able to enjoy life, or will I be house-poor?
If any answer is "no," the home is too expensive.
Houston-Specific Costs People Forget
- Property taxes: Harris County averages 2.2% of assessed value. On a $300,000 home, that's $6,600/year — $550/month
- Flood insurance: If your home is in a flood zone, expect $1,000-$3,000/year on top of regular homeowners insurance
- HOA fees: Common in suburban Houston — $100-$400/month
- Electricity: Houston summers mean $200-$400/month electric bills (June-September)
- Maintenance: Budget 1% of home value per year for repairs ($3,000 on a $300K home)
Quick Affordability Math
For a rough estimate with owner financing:
| Home Price | 10% Down | Est. Monthly (30yr) | Income Needed |
|---|---|---|---|
| $200,000 | $20,000 | ~$1,650 | $5,900/mo |
| $250,000 | $25,000 | ~$2,000 | $7,150/mo |
| $300,000 | $30,000 | ~$2,350 | $8,400/mo |
| $400,000 | $40,000 | ~$3,050 | $10,900/mo |
Estimates include taxes, insurance, and a $35/month servicing fee. Actual payments depend on rate and term.
Want exact numbers for your situation? Try our payment calculator or get pre-qualified for free.
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