Forget interest rates or anything else. Those are fluid and they’re here today, gone tomorrow. Literally. They fluctuate every single day. The number that is constant is your number of affordability and likelihood of getting approved based on that number–if you even want too. So what is that number?

Lenders use this as a preapproval gauge and as a bonus, I’m going to give you another one if you’re someone who likes to eat out a lot, has a lot of expenses with their kids, or just wants to be frugal on their mortgage.

The main number is 36. That’s the DTI percentage an MLO will immediately look at when preapproving your file. If you can’t pass this test, you’re not ready. But that’s not all––let’s say you can pass that 36% test. What then? You tell me. Take your current income right now and multiply it by .36. That’s your estimated preapproval amount. Do you like what you see? No? Then don’t buy! Seriously, if this number isn’t appealing to you it doesn’t matter the rates or the market are, if you’re not comfortable paying that much for a mortgage, then you shouldn’t. If you’re not desperate for a bigger place, a yard, a garage, a safer neighborhood, parks nearby, being closer to work, better schools, etc.; then don’t. Not everyone has those needs and that’s fine. Not everyone is lacking those. If you’re in a place that isn’t a hinderance on your lifestyle more than that mortgage would be, you can stay put and plan for the future in case circumstances change–and rates. You don’t buy based on market. Buy based on what you feel good about affording. ONLY.

What’s the second numbers? If you didn’t like the first, don’t bother with this one. It’s 28. 28% is a basic preapproval calculation for conventional mortages and for those who have a lot of expenses not calculated in their DTI. Many things aren’t because they’re not credit related but can make affording what you’re approved for near impossible in reality. Multiply your income by .28. That is the amount you’d approximately pay per month. Is it more comfortable once you add up all your other expenses and total bills? Is it realistic in the market or somewhere you’d consider moving? These are the numbers that matter. Even when rates drop to 5% prices will soar because so many people will be buying again and bidding wars will create stupid demand that drives prices way beyond their list value so don’t focus on that. Focus on AFFORDABILITY. Regardless of rates, lenders approve you on the same amount. Your approval is the same per month regardless what home prices and rates are doing. Yes, that dollar stretches more when rates and prices are down but that doesn’t happen much so stop waiting for it. Some people have been waiting since the last crash in 2008!!!! They’d have half a million dollars in equity to cash out if they had bought then!! It’s insane. The reason the market crashed was because of loans that no longer exist and are illegal so good luck with that. That kind of crash is NOT happening. Even when half the country wasn’t working during COVID people were buying like crazy and paying way over list price. Stop believing what you read on social media. Most of it is lies by people who can’t afford to leave their parents and never will because they can’t hold a job. That’s who trolls on IG really are so don’t listen to them.

The only number you ever need is the number you can afford. If you can find a home you like at the monthly mortgage you can readily afford, that’s all that matters. The rest is just society blabbing about what they don’t know. Agents and lenders can’t decide for you. Only you can decide what’s best and smart for you to buy and that number is always what makes you comfortable to pay each month in comparison to what you’re paying and getting for that amount now. That’s it. The rest is a distraction. The only number you need to know is the number that makes you feel good about buying and using these calculations to help you understand how that approval can happen and where your current finances need to be. Understand if you have car payments and such, that affects approval and your own comfort level so if you’re not ready to pay, just focus on paying those down as early as possible and building a savings. Don’t stress on trying to buy when it’s really not right for you at this time.