Home playbook
Buying a house
Cap the price from income, then see the monthly payment, then check whether a refinance later would recoup costs.
Buying a house is three different numbers that people collapse into one. The approval estimate is a DTI ceiling — how much PITI plus other debts can consume of gross income before common planning caps break. The mortgage payment is what that price actually drafts each month, including tax, insurance, and PMI when you put less than 20% down. The budget check asks whether leftover take-home still funds savings after that draft.
None of those is a pre-approval. Lenders still look at credit, employment, reserves, and the property. Use a higher APR than today’s quote if you want the ceiling to survive a rate bump. If rates drop later, refinance vs stay is a closing-cost and term-length question, not an automatic yes.
Step 1
Approval ceiling
Start from income, rate, and housing DTI so the search stays inside a payment you can model.
Step 2
Monthly PITI
Turn a price, down payment, and APR into principal, interest, tax, insurance, and PMI.
Step 3
Does the leftover budget work?
If you only know salary, run take-home first. Then drop that cash into 50/30/20 and see whether the new housing number still leaves savings.
Step 4
Later: refinance vs stay
If rates drop, compare cash-flow break-even against staying the course.
Limits and guides
Other playbooks
- Tax season — Estimate federal tax, decide whether to itemize, then set withholding and retirement deferrals before year-end.
- Paying off debt — Protect a cash buffer, then decide whether extra dollars should hit the loan or an investment account.
- Max the match — Take the full employer match, fill HSA if you have an HDHP, then IRA, then taxable growth.