PATRICK’S QUICK ANSWER
Your income is the starting point, but debts, down payment, and today's rates set the real number. Lenders cap your debt-to-income ratio, and in Texas property taxes and insurance take a big slice of the payment. On most budgets you can pre-approve for roughly three to four times your annual income before taxes and insurance. I run your exact numbers first.
Your income sets a realistic starting point for the home you can buy, but the final number depends on your debts, your down payment, and today's rates in Texas, where taxes and insurance are a real part of the payment. Here is how to turn income into a usable number.
Start With a Payment Range From Your Income
A common starting reference is to keep total housing costs near 28% of gross monthly income and total debts near 36%, but those are benchmarks, not rules. Your comfort level and your other financial goals matter more than a rule of thumb.
Subtract Your Debts First
Your car payment, student loans, and credit cards all count against how much house you can qualify for. Two buyers with identical incomes can afford different homes because their debts differ. Your debt to income is the number that matters.
Remember Taxes, Insurance, and Down Payment
In Texas, the property taxes and insurance are part of your payment, so this is where the estimate comes together:
- Estimate property taxes for the price range you are watching.
- Add homeowners insurance and any HOA dues.
- Apply a down payment that fits your savings or down payment assistance.
- Include the rate and your debt to income.
- Arrive at a monthly payment you are comfortable with, then a price range.
Nerd Alert
The actual numbers and math behind this topic, the way I run them on the channel.
Run the affordability estimate on real numbers. At $90,000 a year your gross is $7,500 a month, and 28% is about $2,100: that leaves roughly $1,600 for principal and interest after Texas taxes and insurance, which supports about a $250,000 to $275,000 home with 10% down at 6.76%. At $120,000 the 28% budget is $2,800: about $2,000 for principal and interest after the Texas estimates, which supports roughly $340,000 to $360,000 with 10% down. That is how the income band actually moves.
- At 6.76% each thousand of loan is about $6.49, so a $250,000 loan is about $1,623 of principal and interest.
- Texas taxes and insurance add $350 to $500 per $100,000 of price, so the tax line disciplines the band as much as the rate does.
- Debt shrinks the number fast: $400 a month of car and student payments can remove roughly $60,000 of buying power from your qualifying loan.
The honest order in San Antonio is income minus debts minus the Texas tax line, and the answer is often lower than the hopeful quote and higher than the scared one. I run it with your real statements so the band is true to you, and the final number is on your side.
These are estimates for illustration, not quotes. Figures use publicly available rates and program terms at the time of writing, and your actual rate, fees, and payment depend on your credit file, loan program, and closing date.
