There are a few major factors determine the maximum value of a house you can buy, they are:

- Your household gross income (pre-tax)
- The non-mortgage related expenses associated with the house you plan to buy (property tax, HOA, etc.)
- Your other personal debt (car loan, credit debt, etc.)

Banks typically use three ratios to evaluate a mortgage loan application and determine the maximum amount of loan approved (for a more detailed discussion, see this How Much Home Can You Afford post).

**Maximum Mortgage Payment (Rule of 28%)****Maximum Total Housing Payment (Rule of 32%)****Maximum Monthly Debt Payments (Rule of 40%)**

Use the following Home Affordability Calculator to estimate the maximum value of home you can afford.