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Before you start touring homes in Louisville, it helps to know a price range that fits your income and your monthly debts. This calculator estimates the highest home price you might be able to buy using the debt-to-income (DTI) limits that lenders commonly use for conventional, FHA, VA and USDA loans. It also shows the monthly payment, broken into its parts, at that price.

This is a planning tool and not lending advice. Only a lender can tell you what you qualify for. Treat the results as a starting point for that conversation.

How this calculator works

Two ratios lenders look at

The front-end ratio compares your total monthly housing payment to your gross monthly income. The back-end ratio adds your other monthly debts, such as car loans, student loans and credit card minimums. The calculator finds the price at which each limit is reached and shows the lower of the two as your estimated maximum.

Limits by loan type

• Conventional: 28% front-end and 36% back-end. Mortgage insurance (PMI) applies when you put down less than 20%.
• FHA: 31% front-end and 45% back-end. FHA charges a 1.75% upfront mortgage insurance premium, financed into the loan, plus an annual premium that this tool estimates at about 0.50% to 0.55% of the loan on a typical 30-year loan.
• VA: 43% back-end, with no front-end limit. VA loans have no monthly mortgage insurance but do have a funding fee, which depends on your down payment and whether it is your first use. It is waived for some veterans.
• USDA: 29% front-end and 41% back-end, with a 1% upfront fee financed and a 0.35% annual fee. USDA homes must be in eligible rural areas, and household income must be under program limits.

What goes into the payment

The monthly payment includes principal and interest, property tax, homeowners insurance, mortgage insurance if it applies, and HOA dues. The calculator solves for the price where that total meets your limit. Because property tax rises with the price, the answer is not a simple multiple of your income.

Why your own number may differ

Lenders also review your credit score, cash reserves, job history and the property itself. Strong credit or savings can allow higher ratios, and weaker credit can mean lower ones. A lender's automated underwriting can approve FHA and conventional loans above the ratios used here. A higher limit does not always mean a comfortable budget, so think about what payment you want to carry, not only what you could qualify for.

Louisville and Kentucky details

Property tax in Jefferson County varies by taxing district, but an effective rate near 0.9% to 1.0% of the home's value is a reasonable estimate for planning. Use our Jefferson County property tax calculator for a closer figure on a specific home. Homeowners insurance depends on the age of the roof, the coverage you choose and claims history, and it has been rising across the region, so get a quote early. If you are a veteran or service member, run your numbers with our VA loan calculator as well.

Once you have a range, the next step is a pre-approval letter. Read how to get one in our guide to getting pre-approved for a mortgage in Kentucky.

Assumptions

• The default interest rate of 6.5% is an assumption for illustration, not a current quote. Rates change daily and depend on your credit, loan type and down payment. Replace it with a lender's number.
• Property tax defaults to 0.95% of the price per year, and homeowners insurance to $2,000 a year. Both are estimates.
• PMI for conventional loans is estimated at 0.30% to 0.90% of the loan per year depending on how much you put down. Real PMI depends on credit score.
• VA funding fee is 2.15% for a first-use loan with less than 5% down, 1.5% for 5% to under 10% down, and 1.25% for 10% or more. Repeat use with under 5% down is 3.3%.
• The tool uses a minimum down payment of 3% for conventional and 3.5% for FHA. Income, credit and loan-limit rules are not checked.
• Your closing costs, moving costs and cash reserves are not part of the monthly math.

Frequently asked questions

How much house can I afford on a $90,000 income?

It depends on your debts, down payment and rate. With low monthly debts, a decent down payment and a 6.5% rate, a conventional borrower might land in the high $200,000s to low $300,000s. Run your real numbers above, then confirm with a lender.

What is a good debt-to-income ratio?

Many conventional lenders like to see a back-end ratio near 36% or lower, though approvals above that are common with strong credit and savings. FHA and VA programs often allow higher ratios.

Should I spend all the way up to my maximum?

Not necessarily. The maximum is what a lender may allow, not what fits your life. Leave room for repairs, savings, childcare, travel and everything else in your budget.

Does a bigger down payment help?

Yes. It lowers the loan, can remove or reduce mortgage insurance, and can reduce the VA funding fee. Use the calculator to compare a few down payment amounts side by side.

Is this a pre-approval?

No. This tool does not check your credit or verify any income. A pre-approval from a lender does that. Speak with a lender before you make an offer.

If you would like to talk through your numbers, text or email Rob at Winner Realty and we will point you to a good next step. Browse our other free calculators on the tools page.