To calculate how much house you can afford, you'll need to consider several factors, including your income, debt, expenses, and down payment. Here are the basic steps you can follow:

  1. Calculate your gross annual income: This includes your salary, bonuses, commissions, and any other sources of income. Multiply your monthly income by 12 to get your gross annual income.

  2. Determine your debt-to-income ratio (DTI): Your DTI is the percentage of your income that goes toward paying off debts each month. Most lenders prefer a DTI of 43% or lower, but some may allow up to 50%. To calculate your DTI, divide your monthly debt payments by your gross monthly income.

  3. Determine your monthly expenses: This includes things like food, utilities, transportation, and entertainment. Subtract your monthly expenses from your gross monthly income to determine your disposable income.

  4. Estimate your monthly mortgage payment: Use a mortgage calculator to estimate your monthly payment based on the purchase price of the house, your down payment, and your interest rate.

  5. Determine how much you can afford: Generally, your monthly mortgage payment should not exceed 28% of your gross monthly income. Additionally, you'll want to make sure you have enough disposable income left over to cover other expenses and savings goals.

  6. Consider your down payment: The amount you put down will affect how much you can afford. Most lenders require a down payment of at least 3%, but aim for a higher down payment if possible.

  7. Get pre-approved: Once you have a good estimate of how much house you can afford, consider getting pre-approved for a mortgage. This will give you a better idea of the amount you can borrow and the interest rate you qualify for, allowing you to shop for homes within your budget.

Remember, these calculations are just a guideline, and you'll want to make sure you're comfortable with your monthly payment and overall budget before committing to a mortgage.