To calculate affordability, lenders typically use a Debt-to-Income (DTI) ratio. This ratio compares your monthly debt payments (including the potential mortgage installment) to your gross monthly income. As mentioned earlier, a DTI ratio of around 30% to 35% is often considered manageable for most borrowers. It's essential to consider all your monthly financial commitments, including existing debts, before deciding on a home purchase.
Keep in mind that different lenders may have varying criteria for assessing affordability, and it's always a good idea to consult with a financial advisor or mortgage specialist to get a personalized assessment of your situation and options. Additionally, saving for a higher down payment can significantly improve your chances of qualifying for a mortgage and reduce the monthly payment burden.