Information to keep in mind
Home affordability tool
How much home can I afford?
Get a realistic picture of how much house you can afford, based on your down payment and other factors.1
Understanding debt-to-income
The amount of your income that goes toward paying your debts each month has an impact on how much you can afford to borrow. Take a closer look at how it works.
Frequently asked questions
What factors can affect my affordability?
Your income, debts and down payment are big factors when it comes to calculating your affordability. And your interest rate could also make a big difference because a lower interest rate could significantly lower your monthly mortgage payment.
Income & debts
Most loans require that your debt-to-income ratio not exceed 45%.Down payment
Loans with less than 20% down will generally require Private Mortgage Insurance.Interest rates
Your interest rate is determined by a combination of factors, including credit score, loan type and loan to value, to name a few.How much should I spend on a home?
Determining how much you should spend on a home is unique to your financial situation. You should consider your budget and make sure that your monthly mortgage payment is manageable and that it won’t cause you to struggle to make ends meet every month. A good rule of thumb is to keep your debt-to-income (DTI) ratio around 36% or less.
How much monthly income do I need to buy a house?
Your monthly income is only one factor when it comes to determining your eligibility for a mortgage. You should not only consider how much you are making, but also how much debt you already owe. This is called your debt-to-income ratio (DTI).
Calculate your DTI by dividing the sum of your monthly debts by your monthly gross income. At TIAA Bank, most loans require that your DTI not exceed 45%.
How do I calculate my monthly debt?
You can calculate your monthly debt by adding up all the minimum debt payments you’re required to pay on a monthly basis. If you pay more than the minimum, don’t include the excess payment in your monthly debt total.
Include minimum required payments for things such as
- Credit cards
- Car loans
- Student loans
- Alimony/child support
- Personal loans
- Mortgages on other real estate owned (i.e., investment properties)
Don’t include payments for
- Credit cards that require the balance to be paid in full each month
- Current mortgage*
- Current rent*
*Unless you’re planning to keep your current home or lease and will continue to have these debt obligations.
How much do I need for a down payment and closing costs?
At TIAA Bank we offer loan programs that allow you to put down as little as 3%, as well as 0% down specialty programs for military members and veterans.
You should also consider saving enough to pay closing costs, which can range from 2% to 5% of the loan amount.
Is it important to get a preliminary approval?
Yes, getting a preliminary approval for a mortgage is an important step when you’re trying to figure out how much home you can afford.2 During the preliminary approval process, we will assess your finances to determine how much we can lend you. Knowing this number can help you shop within your means, but remember, just because you qualify for a specific amount doesn’t necessarily mean it will fit into your financial lifestyle.
Take the next steps
Ready to apply?
Get a preliminary approval2
If you’re ready to borrow, we’re ready to help. Start your loan online or call us at 1-833-880-8422.
Boost your savings
Save for your down payment
Whether you’re aiming for 3%, 10% or 20% down, the right savings account can you help you get there faster.
Savings solutions