Wondering how much house you can actually afford? Forget what the bank tells you. Lenders base your mortgage approval on outdated debt-to-income ratios that ignore your real life—and that’s exactly how people end up house-poor. In this video, we break down the most accurate and financially sustainable way to calculate home affordability using a smarter method: the 25% rule.
Instead of relying on gross income or bank pre-approvals, we show you how to determine your home buying budget based on take-home pay—the money that actually hits your bank account. Our rule of thumb: Your monthly mortgage payment, PMI, homeowner's insurance, and HOA fees should never exceed 25% of your net income. This ensures you still have room for retirement savings, emergencies, vacations, and everyday living—without sacrificing your future.
We’ll walk you through:
o Why traditional mortgage advice is flawed
o The hidden dangers of lender-approved debt ratios
o The full breakdown of housing costs (and which ones matter most)
o How to budget for maintenance, taxes, and unpredictable repairs
o A real-world case study to show how this plays out in actual numbers
o Whether you should buy at all—or if renting and investing might be the better move
Whether you're a first-time homebuyer, someone relocating, or trying to figure out if it’s finally time to stop renting, this episode gives you real numbers, honest insights, and zero sales fluff.
Ready to stop guessing and start planning? Check out this episode before you make a home-buying decision that locks up your income for decades.
Don’t become house-poor. Buy smart. Live free.
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