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Mortgage approval estimate
Estimate a maximum home price from income, down payment, other monthly debts, APR, and debt-to-income (DTI) — housing costs as a share of gross income, with a total DTI cap that also counts other debts. Main figure uses a typical 28% / 36% housing and total DTI, with more aggressive levels in the breakdown.
Your situation
Max home price
$395,065
Breakdown
Lenders also use credit, reserves, employment, and appraisal. Mortgage payment calculator>
How this approval estimate is built
This page answers a budget-capacity question: given income, other debts, a rate, a down payment, and tax/insurance dollars, what home price keeps housing and total debt-to-income (DTI) inside common planning caps? It does not pull credit, contact a lender, or issue a pre-approval.
Two DTI caps
Housing DTI (front-end) is PITI (and PMI when LTV is high) divided by gross monthly income. The main result uses a typical planning cap of 28%.
Total DTI (back-end) adds other monthly debts (auto, student, card minimums) on top of housing. The paired classic cap is 36%. If other debts are large, the back-end cap shrinks the housing budget even when income looks fine.
The breakdown also shows more aggressive 33% and 36% housing DTI scenarios (with higher total caps). Those are planning stretches, not promises a program will approve them.
From a monthly budget to a price
- Take the tighter of front-end and back-end housing dollars.
- Reserve monthly property tax (annual ÷ 12) and insurance.
- Estimate PMI when LTV > 80%.
- Put what remains into principal and interest at your APR and term.
- Convert that P&I into a maximum loan, then add the down payment for a max price.
High taxes or a small down payment (PMI) eat the P&I room. A higher APR shrinks the loan that fits the same payment.
Worked sketch
Gross income $8,000/month, other debts $400, 28% / 36% caps:
- Housing cap from 28%: $2,240
- Total cap 36% is $2,880, minus $400 debts → housing also cannot exceed $2,480
- Tighter housing budget: $2,240
- If tax + insurance + PMI already use $600 of that, P&I room is $1,640 — that is what sizes the loan, not the $8,000 headline.
Stress-test a higher APR than today’s quote, and leave room for maintenance (not in DTI). Guide: mortgage approval estimate basics.
Frequently asked questions
Read mortgage approval estimate basics
Is this a mortgage pre-approval?
No. It sizes a maximum home price from income, down payment, other monthly debts, annual interest rate (APR), taxes, insurance, and debt-to-income rules of thumb. Lenders also review credit, employment, reserves, property appraisal, and other factors.
What is housing DTI vs total DTI?
Housing (front-end) DTI is housing costs (principal & interest, property tax, insurance, and PMI when LTV is high) divided by gross monthly income. Total (back-end) DTI also counts other monthly debts such as car or student loans. The main result uses a typical 28% housing / 36% total pair; the breakdown compares more aggressive levels.
What counts as other monthly debts?
Recurring debt payments excluding the mortgage being sized — for example car loans, student loans, personal loans, and credit card minimums. Higher other debts leave less room under the total DTI cap for housing.
Why enter property tax as a dollar amount?
Local tax bills are usually known (or estimated) in dollars. That annual amount is divided by 12 and subtracted from your monthly housing budget so principal and interest fit what is left.
What does annual interest rate (APR) mean here?
It is the assumed fixed rate used to size how large a loan your housing payment can support. A higher APR lowers the maximum loan and home price. Term presets include 10, 15, and 30 years.
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