10 Steps in Your Ohio Homebuying Process
Most traditional home loans require 20% of the home's purchase price up front, while other types of mortgages, like an FHA loan, require much less. Regardless, ...
what you can afford
Before you start shopping for houses, determine your budget to get a sense idea of <anchor>what you can afford</anchor>. Use KEMBA Financial Credit Union’s mortgage calculator to get started. This will give you and your real estate agent a good idea of your range. Remember, you may get approved for more than you can realistically afford, since most calculators and mortgage companies don’t ask about or factor in every regular expense. It’s wise to add a dose of common sense to any mortgage payment decision to ensure you can comfortably afford your monthly payments.
Home Loan Affordability | OH Mortgage Payment & Advisor | KEMBA
Home Loan Affordability \| OH Mortgage Payment & Advisor \| KEMBA


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# How Much Home Can I Afford in Ohio?

![Two women moving in together sit and take in the new home.](/assets/files/ygQgWxyl/personal1600x660.jpg)

When looking to [buy a home in Ohio](/resources/education/10-steps-in-your-ohio-homebuying-process), you’ll need to figure out how much you can afford. Home affordability calculators can be helpful tools for understanding your potential monthly [mortgage payment](/resources/education/calculating-your-monthly-home-mortgage-payment), but they don’t account for the other human factors like family planning and retirement.

To determine what you really should spend on your monthly mortgage, versus what you can technically afford, KEMBA Financial Credit Union offers some standard factors to consider.

1. **Calculate your total debt.**

Your debt-to-income ratio is a calculation used by lenders to figure out how much of your monthly income is already owed to someone. This figure can include [student loans](/personal/borrowing/student-loans), child support or alimony, [auto loans](/personal/borrowing/auto-loans), and the minimum owed on your [credit cards](/personal/borrowing/credit-card). A good rule of thumb is to pay down these other debts before taking on more debt.

2. **Try to spend less than 30% of your gross income on your home.**

A standard rule that lenders use as a criterion is to not allow people to spend more than 30% of their gross income on their [mortgage](/personal/borrowing/mortgages). You may have heard the term “house poor.” This term is used when more than 28% of your income is given toward your housing, which includes principal, interest, taxes and insurance (also known as the housing ratio or front-end ratio). So, while you may have a gorgeous home, you likely won’t be able to buy furniture or entertain guests because you’re living paycheck to paycheck after you pay your mortgage and other bills.

3. **Don’t forget about your home’s down payment cost.**

Another factor to consider when buying a new home is the cost of your down payment. For those taking advantage of an [FHA loan](/personal/borrowing/mortgage/fha-mortgage-loans) or [VA mortgage](/personal/borrowing/mortgage/va-loans), you may only need to put down between 3% and 5% of your home’s purchase price. However, that will add an additional cost of private mortgage insurance (PMI). Most other mortgages require a 20% down payment of the home’s purchase price. It’s a good idea to start saving up for your down payment long before you begin house shopping.

4. **Know what you’re getting into with upkeep.**

When looking at houses, you may get excited by the thought of having your own pool or the big backyard of your dreams. Just remember that these types of items can cost a lot in maintenance over the years. Depending on your climate and landscape, you’ll need to manage your yard’s upkeep, which may include leaf and snow removal, tree trimming or removal, gardening and landscaping, growing and mowing the lawn. A pool can put you in the deep end quickly with the cost of chemicals and ongoing supplies and maintenance, as well as the extra liability that requires insurance.

5. **Failing to plan means planning to fail.**

Another way to look at how much home you can afford is to figure out your long-term lifestyle and plan accordingly. Do you hope to have a family and children someday? Do you love to travel or go out on the weekends? How much do you want in retirement savings? Factor in those additional costs and see if you can still swing it. These factors don’t usually make it into a financial calculator or bank’s checklist, so be prepared to consider these elements before creating your monthly housing budget.

6. **Expect the unexpected.**

One of the homeowner tips you’ve probably heard is to make sure you save enough money in an emergency fund for unexpected repairs and to leave enough in your monthly budget to continuously save for a rainy day. Hopefully, some of the larger ticket items will be revealed during your home inspection, but with homeownership, it’s always smart to expect the unexpected. At some point, your furnace may break, or your roof could need replacing and you will be expected to have the money to pay for it.

Ready to figure out how much home you can afford? After tapping our [financial calculator](/calculators), contact a KEMBA Financial Credit Union mortgage advisor today.

At KEMBA Financial Credit Union, we offer personal banking solutions for Central Ohio residents, as well as a full suite of personal banking products and services with low fees, competitive rates on [credit cards](/personal/borrowing/credit-card), home [mortgages and home equity loans](/personal/borrowing/mortgages), [auto loans](/personal/borrowing/auto-loans), [personal](/personal/borrowing/personal-loans) and [student loans](/personal/borrowing/student-loans), and [financial wellness](/resources/education/financial-wellness) and [counseling services](/resources/education/financial-counseling).

To learn more, call us at 614.235.2395, option 4, or visit one of our local branches in [Pickerington](/about/find-a-location/pickerington-branch), [Gahanna](/about/find-a-location/gahanna-branch), [Bellefontaine](/about/find-a-location/bellefontaine-branch), [Clintonville](/about/find-a-location/clintonville-branch), [Grove City](/about/find-a-location/grove-city-branch), [Hamilton Quarter,](/about/find-a-location/hamilton-quarter-branch) [Hilliard](/about/find-a-location/hilliard-branch), [Lewis Center](/about/find-a-location/lewis-center-branch), [Powell](/about/find-a-location/powell-branch), [Reynoldsburg](/about/find-a-location/reynoldsburg-branch), [Westerville](/about/find-a-location/westerville-branch) or [Whitehall](/about/find-a-location/whitehall-branch). Our dedicated associates will help you navigate your individual financial situation and help you discover why KEMBA is a better way to bank.

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