ABA Family Legal Guide

Buying and Selling a Home

Financing a Home Purchase

The Basics

How much home can I afford?

This is one of the first things to consider when buying a home. Unless you are paying cash for a home, how much you can afford depends on how much you can borrow, which depends on your income, assets, expenses, and debts (including automobile or education loans and outstanding credit card balances). How much you can afford will also vary with prevailing interest rates on mortgages, the cash, if any, needed for a down payment, and closing costs. Knowing what you can afford will narrow your range so you will not waste time by looking at homes that cost too much.