By Rogelio Rodriguez
Realtor® Vida Properties | eXp Realty
📞 720-724-8187 | 📧 rogelio@vidabroker.com
Buying a home — whether it’s your first or your third— is a big decision and a large investment. Over the years, I’ve helped many Colorado families understand what they can truly afford. And here’s something I’ve learned: the numbers from a lender or calculator are just part of the story. After looking at affordability calculators online, I decided to make my own and make it available to you.
👉 Open the calculator now and follow along as we break things down:
vidabroker.com/my-home-affordability-calculator
What the Rules Say — and What Real Life Looks Like
Many online tools and lenders use the “28/36 rule.” This means:
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No more than 28% of your gross (before tax) income should go to your house payment.
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No more than 36% of your income should go to all debt, including the mortgage.
This rule is helpful, but it doesn’t always fit every buyer.
For example, FHA loans may allow you to use up to 50% of your income toward total debt. In housing counseling, we also look at net income — the money you take home after taxes. When we do that, a common guide is to spend 40% of your take-home pay on your full housing cost. That includes mortgage, taxes, insurance, and any HOA fees.
The remaining 60% of your income is for everything else — groceries, gas, childcare, savings, and fun.
Still, if you find a home you love, and your lender approves it, you can choose to spend a little more — as long as you understand your other expenses and make adjustments.
The Lender’s Limit Is Not Always Your Limit
A lender gives you a maximum approval based on risk, but only you know what fits your family’s lifestyle. That’s why I always say:
Your real affordability is what the lender allows, balanced with what fits your monthly budget.
🧮 Explore Multiple Calculators
The NerdWallet Home Affordability Calculator is a simple, helpful starting point. It gives a quick overview and explains the basics well.
However, it doesn’t capture the full picture — especially when it comes to personal expenses or flexible lender guidelines.
To examine straight mortgage calculations, try Karl’s Mortgage Calculator. It lets you adjust taxes, insurance, and PMI, and gives a closer estimate of real lender-approved payments. It also provides principal vs. interest charts, balance adjustment for extra payments, and much more.
To simplify the comparison, we’re keeping recurring expenses at zero in this example. We’re also using a 36% back-end debt-to-income (DTI) ratio, just like NerdWallet.
🟢 NerdWallet Calculator: Home price = $362,427
🟢 My Calculator (36% DTI): Home price = $391,115
🟢 Lender Max (based on DTI): Home price limit = $362,363
👉 These are very different numbers, even though the income is the same. As you can see, NerdWallet’s estimate is close to the lender’s maximum. But if you spend less than the guideline amount on your personal expenses, shouldn’t you be able to afford a higher-priced home?
Now let’s add $400 in monthly recurring expenses:
🟢 NerdWallet drops the home price to $298,212
🟢 My calculator drops it to $357,757
🟢 Lender still approves up to $364,913
That’s a big difference, right? According to NerdWallet, you can only afford under $300,000—which might not go very far in Denver. You get a more realistic number when the recurring, or personal expenses, are not calculated into the monthly debt. Using this approach, the Vidabroker Calculator keeps the recommended purchase price at around $358,000.
Keep in mind that the PMI (private mortgage insurance) is directly linked to the loan amount, so the lender’s max adjusts slightly. In theory, property taxes and insurance would change as well, but we’re keeping those numbers the same for simplicity.
🧠 Home Finance Strategy Simulator + 📈 Finance Strategy Coach
Take the guesswork out of buying a home. The Home Finance Strategy Simulator gives you a clear picture of what you could afford — and what you should consider. But it doesn’t stop at numbers. The built-in 📈 Finance Strategy Coach provides smart, personalized tips based on your input.
💬 For example:
“💸 PMI can sneakily drain your budget. Explore options to reduce loan risk.”
These insights help you understand not just the how much, but why. Try entering different income levels, expenses, or down payment amounts — not only to compare home price ranges, but to unlock powerful feedback that helps you plan wisely.
👉 Pro Tip: Run several “what-if” scenarios. Small changes in your financial picture can lead to big differences in your purchasing power and monthly costs.
Email the results to yourself to keep for your records. Don’t worry — the calculator does not collect or store any personal information.
📘 Glossary: Home Affordability Calculator Terms 🙂
A quick guide to help you plan smarter.
Real estate and mortgage terms can feel like a new language — but understanding them makes a big difference. That’s why the last section of the page includes a simple glossary to help you decode the numbers, understand lender expectations, and make confident financial decisions.
What Does This Mean for You?
It means you shouldn’t base your budget on just one tool. Use calculators as a starting point — but think about:
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Your true take-home pay
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Your other monthly bills
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Your savings and goals
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What you’re comfortable spending if something changes (like income or interest rates)
A Few Quick Tips:
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Use multiple calculators and compare results.
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Try calculations using both gross and net income.
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Don’t forget about other monthly costs: car, gas, child care, insurance, phone plans.
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Ask yourself: Can I still enjoy life and cover surprise expenses at this payment level?
📞 Ready to Explore Your Options?
If you’re curious about how much home you can afford or want help understanding your numbers more clearly, let’s set up a time to talk. Use the calculator as a starting point, then connect with me for a deeper conversation about your housing goals, financing options, and next steps. Visit my 🗓️ online calendar to meet in person, by phone, or virtually — whatever works best for you.
You can also just call me at (720) 724-8187 or send me a message to rogelio@vidabroker.com. Let’s get your homeownership journey started with the right tools and the right guidance.
Rogelio Rodriguez
