5 min read
Affordability comes down to your income, monthly debts, down payment, and current rates — not just the price tag. Lenders look at ratios, but the number that matters is a monthly payment you're comfortable with. Here's how it actually works.
The 28/36 rule
A common guideline: keep your housing payment under about 28% of gross monthly income, and total debt (housing + car + cards + student loans) under about 36%. Many loan programs allow higher — FHA can go to ~50% DTI for strong files — but the guideline keeps the payment livable.
What lenders actually count
Your payment includes principal, interest, property taxes, homeowners insurance, and (if applicable) mortgage insurance and HOA dues — 'PITI'. Rates and taxes vary by area, so the same income buys more in the Inland Empire than in coastal LA.
How to raise your budget
Lowering monthly debt, improving your credit score, or adding a co-borrower can meaningfully increase what you qualify for. Down payment assistance can also reduce the cash you need up front without changing the price you can afford.
Frequently asked questions
- Does getting pre-approved tell me what I can afford?
- Yes — a pre-approval reviews your income, debts, and credit to give you a real, lender-backed price range, which is stronger than an online estimate and required to make offers.
- How much income do I need to buy in Southern California?
- It depends heavily on the county, your down payment, and debts. Because high-cost SoCal counties have higher loan limits, more of the market stays in conventional/FHA financing — we can run your specific numbers.
This guide is general educational information, not financial advice or a commitment to lend. Programs, rates, and requirements change. Confirm your specifics with a licensed loan officer. Equal Housing Lender · NMLS #856170.